FACTS Viola Ilolloway and Renee Forrow are the sole excual shareholders in the corporation of Ilolloway And Forrow Enterprises, Inc. The corporation, which is a retail office supplies and stationery store, began its operations on January 2, 1985 (also date of incorporation). For Federal Income Tax purposes, the corporation is a calendar year taxpayer and uses the Accrual Method Of Accounting Viola Holloway is the president of the corporation and its contact person for Federal Income Tax purposes and Rence Forrow is the secretary and treasurer of the corporation. Both are full-time eriployees of the corporation devoting one hundred percent (100%) of their time to the business and each has an annual salary of $75,000. Viola Holloway's social security number is 678-90-1234 Rence Forrow has social security number of 789-01-2345 and her address is 1606 Natalie Court Ilouston, Texas 77089-4637. FINANCIAL INFORMATION During the year of 2019, Holloway And Forow Enterprises, Inc. reported the following Income and Expenses (including recessary accruals) for Financial Accounting purposes: Cross Receipts $1,482,000 Sales Retums And Allowances 109,000 Purchases $10,000 Dividends Received From Stock (Not Qualificd Dividends) Investments In Less Than twenty percent (20%) Owned United States (U. S.) Corporation 80,000 Interest Income: Taxable Interest 18,000 Tax-Exempt Interest 7.200 Salarice: Officers 150,0XX) Other Employees 108,000 Repairs And Maintenance 19,300 Rent Expense - Office 84,000) Rent Expense - Equipment 15,500 Payroll Taxes (Federal And State) 19,600 Interest Expense 25,200 Advertising Expense 33,500 Charitable Contributions 48,000 Legal And Professional Fees 18,000 Depreciation Expense 50,000 Utilities Expense 27.300 Employee's Health Insurance Premiums 14,200 Meals For Clients 5,000 Officers' Life Insurance Premiumns - Based upon Straight-Line Depreciation, a ixseful life of five (5) years and no salvage value for all assets (sce specific assets below).** - Holloway And Forrow Enterprises, Inc. Is The Designated Beneficiary The Ilolloway And Eorts Enterprises, Inc. owns the following depreciable assets: ASSET DESCRIPTION DATE ACQUIRED ORIGINAL COST Automobile - 2018 Lexus 460 April 1, 2018 $50,000 (Five-year Properly) Automobile - 2018 Cadillac Seville April 1, 2018 50,000 (Five-year Property) Furniture And Fixtures May 1, 2017 150.000 (Seven-year Property) Each automobile was used a total of 18,000 rruiles during the year of 2019 all which were business miles. The automobiles were not available for personal use during off-duty hours and were used solely by Viola Holloway and Renee Forrow, who both have another vehicle available for personal use. For Federal Income Tax purposes, all of these assets are depreciated using the Modified Accelerated Cost Recovery System (MACRS). Section 179 Deduction was not elected in regards to any of these assets nor was Straight-Line Depreciation used. BALANCE SITEETS The Balance Sheets (Financial Accounting) for the Holloway And Forrow Enterprises, Inc, at the beginning and ending of the year of 2019 are as follows: ASSETS January 1 December 31 Cash S 36.000 $ 84,000 Trade Notes And Accounts Receivable 96,000 90,000 Inventory Valued Al Cost) * 120,000 100,000 Marketable Securities - Long Term 140.000 170,000 Depreciable Assets (And Land) 201) * Less: Accumulated Depreciation 465,000) (115,000) Other Assets (Deposits) 12,000 12,000 TOTAL ASSETS $ 599,000 $ 601,000 260,000 ** 16,00X) LIABILITIES AND STOCKHOLDERS' EQUITY Accounts Payable (Non Recourse) S 96,000 Federal Income Taxes Payable 8,600 Notes Payable - Short Term (Recourse) Notes Payable - Long Term (Recourse) 164,000 Common Stock 10,000 Rctained Earnings (Unappropriated) 304,400 TOTAL LIABILITIES AND STOCKHOLDERS EQUITY $ 599 000 $ 70,400 2 24,000 212,000 10,000 279,890 $ 601,000 14,400 ** - The rules of Section 263A of the Internal Revenue Code do not apply to the corporation ++. Includes $10,000 allocated to Land, ESTIMATED TAX PAYMENTS During 2019, Holloway And Forrow Enterprises, Inc. made the following estimated tax payments: April 15, 2019 June 17, 2019 September 16, 2019 December 16, 2019 $20,000 $16,000 $10,000 $10,000 The 2018 Federal Income Tax liability for Holloway And Forrow Enterprises, Inc. was $52,800 and no overpayment of 2018 Federal Income Tax is being applied to the 2019 Federal Income Tax liability of Holloway And Forrow Enterprises, Inc. OTHER INFORMATION Both shareholders of Holloway And Forrow Enterprises, Inc. are United States Citizens. Holloway And Forrow Enterprises, Inc. does not own directly or indirectly fifty percent (50%) or more of the voting stock in any other domestic corporation and the corporation is not a subsidiary in an affiliated group or a parent-subsidiary controlled group. During the year of 2019, Holloway And Forrow Enterprises, Inc. paid cash dividends of $280,000 ($140,000 to each shareholder) and the corporation did not pay dividends in excess of the corporation's Current Earnings And Profits and Accumulated Earnings And Profits. In addition, Holloway And Forrow Enterprises, Inc. is not a shareholder in any foreign corporation nor has any interest in or a signature or other authority over any financial account in a foreign country. Furthermore, during the year of 2019, the corporation did not receive a distribution from nor was a grantor of, or transferor to, a foreign trust. Moreover, Holloway And Forrow Enterprises, Inc. did not issue publicly offered debt instruments with original issue discount. Finally, the corporation had no Net Operating Losses (NOL's) carryover from prior tax years. REQUIRED Prepare the C (Regular) Corporation Tax Return for the Holloway And Forrow Enterprises, Inc. for the tax year of 2019. The following Forms are needed to complete the Tax Return: Form 1120 Form 1125-A Form 1125-E Schedule G (Form 1120) Form 4562 The Income Tax Return is due on SEPTEMBER 19, 2020. (PLEASE REMEMBER TO PUT YOUR NAME ON THE PROJECT). FACTS Viola Ilolloway and Renee Forrow are the sole excual shareholders in the corporation of Ilolloway And Forrow Enterprises, Inc. The corporation, which is a retail office supplies and stationery store, began its operations on January 2, 1985 (also date of incorporation). For Federal Income Tax purposes, the corporation is a calendar year taxpayer and uses the Accrual Method Of Accounting Viola Holloway is the president of the corporation and its contact person for Federal Income Tax purposes and Rence Forrow is the secretary and treasurer of the corporation. Both are full-time eriployees of the corporation devoting one hundred percent (100%) of their time to the business and each has an annual salary of $75,000. Viola Holloway's social security number is 678-90-1234 Rence Forrow has social security number of 789-01-2345 and her address is 1606 Natalie Court Ilouston, Texas 77089-4637. FINANCIAL INFORMATION During the year of 2019, Holloway And Forow Enterprises, Inc. reported the following Income and Expenses (including recessary accruals) for Financial Accounting purposes: Cross Receipts $1,482,000 Sales Retums And Allowances 109,000 Purchases $10,000 Dividends Received From Stock (Not Qualificd Dividends) Investments In Less Than twenty percent (20%) Owned United States (U. S.) Corporation 80,000 Interest Income: Taxable Interest 18,000 Tax-Exempt Interest 7.200 Salarice: Officers 150,0XX) Other Employees 108,000 Repairs And Maintenance 19,300 Rent Expense - Office 84,000) Rent Expense - Equipment 15,500 Payroll Taxes (Federal And State) 19,600 Interest Expense 25,200 Advertising Expense 33,500 Charitable Contributions 48,000 Legal And Professional Fees 18,000 Depreciation Expense 50,000 Utilities Expense 27.300 Employee's Health Insurance Premiums 14,200 Meals For Clients 5,000 Officers' Life Insurance Premiumns - Based upon Straight-Line Depreciation, a ixseful life of five (5) years and no salvage value for all assets (sce specific assets below).** - Holloway And Forrow Enterprises, Inc. Is The Designated Beneficiary The Ilolloway And Eorts Enterprises, Inc. owns the following depreciable assets: ASSET DESCRIPTION DATE ACQUIRED ORIGINAL COST Automobile - 2018 Lexus 460 April 1, 2018 $50,000 (Five-year Properly) Automobile - 2018 Cadillac Seville April 1, 2018 50,000 (Five-year Property) Furniture And Fixtures May 1, 2017 150.000 (Seven-year Property) Each automobile was used a total of 18,000 rruiles during the year of 2019 all which were business miles. The automobiles were not available for personal use during off-duty hours and were used solely by Viola Holloway and Renee Forrow, who both have another vehicle available for personal use. For Federal Income Tax purposes, all of these assets are depreciated using the Modified Accelerated Cost Recovery System (MACRS). Section 179 Deduction was not elected in regards to any of these assets nor was Straight-Line Depreciation used. BALANCE SITEETS The Balance Sheets (Financial Accounting) for the Holloway And Forrow Enterprises, Inc, at the beginning and ending of the year of 2019 are as follows: ASSETS January 1 December 31 Cash S 36.000 $ 84,000 Trade Notes And Accounts Receivable 96,000 90,000 Inventory Valued Al Cost) * 120,000 100,000 Marketable Securities - Long Term 140.000 170,000 Depreciable Assets (And Land) 201) * Less: Accumulated Depreciation 465,000) (115,000) Other Assets (Deposits) 12,000 12,000 TOTAL ASSETS $ 599,000 $ 601,000 260,000 ** 16,00X) LIABILITIES AND STOCKHOLDERS' EQUITY Accounts Payable (Non Recourse) S 96,000 Federal Income Taxes Payable 8,600 Notes Payable - Short Term (Recourse) Notes Payable - Long Term (Recourse) 164,000 Common Stock 10,000 Rctained Earnings (Unappropriated) 304,400 TOTAL LIABILITIES AND STOCKHOLDERS EQUITY $ 599 000 $ 70,400 2 24,000 212,000 10,000 279,890 $ 601,000 14,400 ** - The rules of Section 263A of the Internal Revenue Code do not apply to the corporation ++. Includes $10,000 allocated to Land, ESTIMATED TAX PAYMENTS During 2019, Holloway And Forrow Enterprises, Inc. made the following estimated tax payments: April 15, 2019 June 17, 2019 September 16, 2019 December 16, 2019 $20,000 $16,000 $10,000 $10,000 The 2018 Federal Income Tax liability for Holloway And Forrow Enterprises, Inc. was $52,800 and no overpayment of 2018 Federal Income Tax is being applied to the 2019 Federal Income Tax liability of Holloway And Forrow Enterprises, Inc. OTHER INFORMATION Both shareholders of Holloway And Forrow Enterprises, Inc. are United States Citizens. Holloway And Forrow Enterprises, Inc. does not own directly or indirectly fifty percent (50%) or more of the voting stock in any other domestic corporation and the corporation is not a subsidiary in an affiliated group or a parent-subsidiary controlled group. During the year of 2019, Holloway And Forrow Enterprises, Inc. paid cash dividends of $280,000 ($140,000 to each shareholder) and the corporation did not pay dividends in excess of the corporation's Current Earnings And Profits and Accumulated Earnings And Profits. In addition, Holloway And Forrow Enterprises, Inc. is not a shareholder in any foreign corporation nor has any interest in or a signature or other authority over any financial account in a foreign country. Furthermore, during the year of 2019, the corporation did not receive a distribution from nor was a grantor of, or transferor to, a foreign trust. Moreover, Holloway And Forrow Enterprises, Inc. did not issue publicly offered debt instruments with original issue discount. Finally, the corporation had no Net Operating Losses (NOL's) carryover from prior tax years. REQUIRED Prepare the C (Regular) Corporation Tax Return for the Holloway And Forrow Enterprises, Inc. for the tax year of 2019. The following Forms are needed to complete the Tax Return: Form 1120 Form 1125-A Form 1125-E Schedule G (Form 1120) Form 4562 The Income Tax Return is due on SEPTEMBER 19, 2020. (PLEASE REMEMBER TO PUT YOUR NAME ON THE PROJECT)