Determine the minimum federal income tax liability and the taxes owed at the time of filing based on the following data:

Cash receipts: $160,900 (Sales of $156,100 plus $4,800 donated to IRS by Golden Kettle customers)

Cash Disbursements
Merchandise purchases	$ 52,000
Wages and related payroll taxes (a)	20,870
Rentspace and equipment (b)	3,600
Property insurance (c)	2,850
Equipment purchases (d)	15,000
Loan payments (e)	1,200
Utilities	1,400
Food license (f)	400
Professional fees (g)	1,900
Repairs and maintenance (R&M) (h)	950
Advertising and promotion (i)	4,000
Taxes (j)	10,000
Telephone	480
Supplies	1,300
Miscellaneous	520
Total	$116,470

Other Information

1. IRS is an accrual-basis, calendar-year taxpayer.

2. Inventory information

	F I F O	L I F O
Beginning Inventory	$12,000	$11,200
Ending Inventory	$14,000	$12,100

3. Explanation of notes:

a. Includes employers share of FICA.

b. Rent is $250/month. A $350 security deposit was made and the final months rent was paid in advance on an 18-month lease.

c. Two assets are insured: Inventory$150 (a floating figure based on monthly inventory levels). Tangible personal property$2,700 (a three-year policy that was acquired on July 1 of the current year). 20Case developed by Ken Milani, Professor, University of Notre Dame. Reprinted with permission.

d. Additional equipment not provided by the owner of the facility is required and acquired. Information pertaining to this equipment is shown below:

	Class Life	Cost	Current Year Depreciation
Description
Cash register	5-year	$ 5,000	$1,000 (20% $5,000)
Broaster	7-year	$10,000	$1,430 (14.3% $10,000)

e. $200 a month to Buckner Bank on a $3,000 loan used to purchase the equipment in (d). Interest expense is $450.

f. $200 is paid on January 1 and July 1 to the city controller who issues a six-month license at those dates.

g. Breakdown of this expense indicates: $200Preparation of prior years tax return. $600Payment to an architect for her plans, which will be used to build another restaurant in the near future. $1,100Attorney fee in settling a claim brought by a customer who claimed that she was served undercooked food, which led to her illness.

h. The previous customer claim brought about an extensive inspection by the Health Department, which ordered several changes (costing $650) in the operation and fined IRS $300. The $300 is included in the $950 R&M figure. (Note that fines are not deductible on a federal income tax return.)

i. Includes $1,600 of newspaper advertising plus $2,400 paid for a Yellow Pages ad that will appear in next years telephone directory, which will be distributed in October of next year.

j. Estimated federal income tax payments during the year.