Fielding Sporting Goods Corporation (FSGC) is a calendar-year corporation. Please see the C-Corporation Reconciliation Template excel file for FSGCs current-year audited financial income statement. Notes with important tax information to accompany those financials are provided below. Notes: 1. FSGC owns 40 percent of the outstanding Magnolia Corp. (MC) stock. Magnolia Corp. reported $1,000,000 of income for the year. FSGC accounted for its investment in MC under the equity method and it recorded its pro rata share of MCs earnings for the year. MC also distributed a $150,000 dividend to FSGC. 2. Of the $20,000 interest income, $7,000 was from a City of Atlanta municipal bond, $5,500 was from a Dekalb County municipal bond, $3,500 was from a fully taxable corporate bond, and the remaining $4,000 was from a money market account. 3. This amount includes officer compensation of $2,500,000 (one officer received $1,500,000 compensation, the remaining $1,000,000 was allocated equally between 4 other officers). 4. This amount is the portion of non-qualified stock option compensation that was expensed during the year (recipients are officers). There were no exercises during the year. 5. FSGC actually wrote off $90,000 of its accounts receivable as uncollectable. 6. Regular tax depreciation calculated under MACRS was $1,600,000. 7. In the current year, FSGC paid $20,000 of actual payments on warranties it provided to customers. 8. FSGC made $425,000 of cash contributions to qualified charities during the year. 9. On July 1 of this year, FSGC acquired the assets of another business. In the process it acquired $300,000 of goodwill. At the end of the year, FSGC wrote off $30,000 of the goodwill as impaired. 10. The other expenses do not contain any items with book-tax differences. 11. This is an estimated tax provision (federal tax expense) for the year. Assume that FSGC is not subject to state income taxes.
(1) prepare a book to tax reconciliation
(2) complete a portion of a corporate tax return for 2020 (complete only page 1 of Form 1120)
Fielding Sporting Goods Corporation Book to Tax Reconciliation For the Year Ended December 31, 2020 Description Book Income Notes Book to Tax Adjustments Ref Taxable income Dr Cr $ 37,000,000 (24,500,000) 12,500,000 1 2 B 400,000 20,000 50,000 12,970,000 3 4 D Revenue from sales Cost of goods sold Gross profit Other income Income from investment in corporate stock Interest income Miscellaneous income Gross income Expenses Compensation Stock option compensation Advertising Rent Bad Debt expense Depreciation Warranty expenses Business meals Business entertainment Goodwill impairment Other expenses Federal income tax expense Total expenses before charitable contr. & DRD Income before charitable contribution Charitable contributions Dividends Received Deduction Book/Taxable income 5 6 7 (6,800,000) (200,000) (1,450,000) (42,000) (58,000) (1,275,000) (85,000) (29,000) (48,000) (30,000) (140,000) (750,000) (10,907,000) 2,063,000 (425,000) 1 G H 1 J a 9 10 11 K 00 8 1 L A 1,638,000 Fom 1120 Income AA U.S. Corporation Income Tax Return OME No. 1545-0123 For calendar year 2020 or tax year beginning Department of the Treasury 2020, ending Internal Revenue Service 2020 Go to www.irs.gov/Form1120 for instructions and the latest information A Check it Name ta Corolidated retum B Employer identification number attach Form 8599 Lilnonite console TYPE Number, stroot, and room or suite no. Ta P.O. bax, se instructions DOR C Date incorporated 2 mm PRINT tech. City or town, state or province, country, and ZIP or foreign postal code 3 Personal service corp Total assets instructions 4 SchachdE Check it (1) Initial ratum 12 Finalratum 22 Name change Address change 1a Gross receipts or sales 1a b Returns and allowances 1b c Balance. Subtract line 1b from line la 1c 2 Cost of goods sold attach Form 1125-A) 2 3 Gross profit. Subtract line 2 from line 1c 3 4 Dividends and inclusions (Schedule C, line 23) 5 Interest 5 6 Gross rents 6 7 Gross royalties 7 8 Capital gain net income (attach Schedule D Form 1120W 8 9 Net gain or loss) from Form 4797, Part II, line 17 (attach Form 4797) 9 10 Other income see instructions-attach statement 10 11 Total income. Add lines through 10 11 12 Compensation of officers (see instructions-attach Form 1125-E) 12 13 Salaries and wages fess employment credits) 13 14 Repairs and maintenance 14 15 Bad debts. 15 16 Rents 16 17 Taxes and licenses 17 18 Interests instructions 18 19 Charitable contributions 19 20 Depreciation from Form 4562 not claimed on Form 1125-A or elsewhere on return (attach Form 4562) 20 21 Depletion. 21 22 Advertising 22 23 Pension, profit-sharing, etc., plans 23 24 Employee benefit programs 24 25 Reserved for future use. 25 26 Other deductions (attach statement 26 27 Total deductions. Add lines 12 through 26 27 28 Taxable income before net operating loss deduction and special deductions. Subtract line 27 from line 11. 28 29a Net operating loss deduction (see instructions 29a b Special deductions (Schedule C, line 24). 29b c Add lines 29a and 29b 29c 30 Taxable income. Subtract line 29c from line 28. See instructions 30 31 Total tax (Schedule J, Part , line 11) 31 32 2020 net 965 tax liability paid (Schedule J, Part II, line 12) 33 Total payments, credits, and section 965 net tax liability (Schedule J. Part III, line 23) 33 34 Estimated tax penalty. See instructions. Check Form 2220 is attached 34 35 Amount owed. I line 33 is smaller than the total of lines 31, 32 and 34, enter amount owed 35 36 Overpayment. If line 33 is larger than the total of lines 31, 32 and 34, enter amount overpaid 36 37 Enter amount from line 38 you want: Credited to 2021 estimated tax Refunded 37 Under pain of gry. I decir alle mindrom, including and women and to the best of my knowledge and beliet, Sign and complete Declaration of protein bed on all information of where yowledge May the de Here with the Signature of officer TH Yes No PrintType preparer's name Preparar's signature Paid Date PTIN Check Preparer salomplayed Use Only Fam's EIN Firm's address For Paperwork Reduction Act Notice, see separate instructions. Cat No. 114500 Form 1120 2020 Deductions (See Instructions for limitations on deductions.) A Phone Fielding Sporting Goods Corporation Book to Tax Reconciliation For the Year Ended December 31, 2020 Description Book Income Notes Book to Tax Adjustments Ref Taxable income Dr Cr $ 37,000,000 (24,500,000) 12,500,000 1 2 B 400,000 20,000 50,000 12,970,000 3 4 D Revenue from sales Cost of goods sold Gross profit Other income Income from investment in corporate stock Interest income Miscellaneous income Gross income Expenses Compensation Stock option compensation Advertising Rent Bad Debt expense Depreciation Warranty expenses Business meals Business entertainment Goodwill impairment Other expenses Federal income tax expense Total expenses before charitable contr. & DRD Income before charitable contribution Charitable contributions Dividends Received Deduction Book/Taxable income 5 6 7 (6,800,000) (200,000) (1,450,000) (42,000) (58,000) (1,275,000) (85,000) (29,000) (48,000) (30,000) (140,000) (750,000) (10,907,000) 2,063,000 (425,000) 1 G H 1 J a 9 10 11 K 00 8 1 L A 1,638,000 Fom 1120 Income AA U.S. Corporation Income Tax Return OME No. 1545-0123 For calendar year 2020 or tax year beginning Department of the Treasury 2020, ending Internal Revenue Service 2020 Go to www.irs.gov/Form1120 for instructions and the latest information A Check it Name ta Corolidated retum B Employer identification number attach Form 8599 Lilnonite console TYPE Number, stroot, and room or suite no. Ta P.O. bax, se instructions DOR C Date incorporated 2 mm PRINT tech. City or town, state or province, country, and ZIP or foreign postal code 3 Personal service corp Total assets instructions 4 SchachdE Check it (1) Initial ratum 12 Finalratum 22 Name change Address change 1a Gross receipts or sales 1a b Returns and allowances 1b c Balance. Subtract line 1b from line la 1c 2 Cost of goods sold attach Form 1125-A) 2 3 Gross profit. Subtract line 2 from line 1c 3 4 Dividends and inclusions (Schedule C, line 23) 5 Interest 5 6 Gross rents 6 7 Gross royalties 7 8 Capital gain net income (attach Schedule D Form 1120W 8 9 Net gain or loss) from Form 4797, Part II, line 17 (attach Form 4797) 9 10 Other income see instructions-attach statement 10 11 Total income. Add lines through 10 11 12 Compensation of officers (see instructions-attach Form 1125-E) 12 13 Salaries and wages fess employment credits) 13 14 Repairs and maintenance 14 15 Bad debts. 15 16 Rents 16 17 Taxes and licenses 17 18 Interests instructions 18 19 Charitable contributions 19 20 Depreciation from Form 4562 not claimed on Form 1125-A or elsewhere on return (attach Form 4562) 20 21 Depletion. 21 22 Advertising 22 23 Pension, profit-sharing, etc., plans 23 24 Employee benefit programs 24 25 Reserved for future use. 25 26 Other deductions (attach statement 26 27 Total deductions. Add lines 12 through 26 27 28 Taxable income before net operating loss deduction and special deductions. Subtract line 27 from line 11. 28 29a Net operating loss deduction (see instructions 29a b Special deductions (Schedule C, line 24). 29b c Add lines 29a and 29b 29c 30 Taxable income. Subtract line 29c from line 28. See instructions 30 31 Total tax (Schedule J, Part , line 11) 31 32 2020 net 965 tax liability paid (Schedule J, Part II, line 12) 33 Total payments, credits, and section 965 net tax liability (Schedule J. Part III, line 23) 33 34 Estimated tax penalty. See instructions. Check Form 2220 is attached 34 35 Amount owed. I line 33 is smaller than the total of lines 31, 32 and 34, enter amount owed 35 36 Overpayment. If line 33 is larger than the total of lines 31, 32 and 34, enter amount overpaid 36 37 Enter amount from line 38 you want: Credited to 2021 estimated tax Refunded 37 Under pain of gry. I decir alle mindrom, including and women and to the best of my knowledge and beliet, Sign and complete Declaration of protein bed on all information of where yowledge May the de Here with the Signature of officer TH Yes No PrintType preparer's name Preparar's signature Paid Date PTIN Check Preparer salomplayed Use Only Fam's EIN Firm's address For Paperwork Reduction Act Notice, see separate instructions. Cat No. 114500 Form 1120 2020 Deductions (See Instructions for limitations on deductions.) A Phone
