Hello,

I need help with this tax return assignment. Instruction file details how to work the assignment.

Sam Smith (446-46-4646) and Jane Jones (312-12-1212) own and operate The Sporting Goods Shop, Inc, a retail sporting goods store. The corporation was formed on January 1, 2011. Sam is the president and owns 70 percent of the common stock while Jane is the secretary-treasurer and owns the remaining 30 percent. Both are U.S. citizens and full-time employees of the corporation and devote 100 percent of their work time to the business. Sam received a salary of $150,000 and Jane received a salary of $60,000. Other pertinent information:

The corporate address is 1234 Midtown Blvd., Houston, TX 77006. The employer ID number is 76-0245100; the principal business activity is ??? (look it up in the tax software).

The corporation uses the accrual method of accounting and reports on a calendar year basis. For AMT purposes, the annual gross receipts in 2014 were $2,000,000; 2013, $1,900,000; 2012, $1,500,000; 2011, $1,000,000.

During 2015, the corporation distributed a cash dividend of $60,000 to Sam and Jane based on their ownership interests. It does not exceed the corporation's total earnings and profits.

The corporation's estimated bad debt expense for the year was $5,000. Actual bad debts were $1,000 from delinquent customer Romney who died penniless.

Equipment and other depreciable assets are fully depreciated for both tax and book purposes.

Life insurance premiums were paid on term policies covering the lives of the two owners. The corporation is the beneficiary.

The company took a physical count of its inventory on the last day of the year. On that date, it was determined that ending inventory was $360,000. This is not reflected in the financial statements below. Inventories are determined using the lower of cost or market method.

During 2015, the corporation made timely estimated payments of $240,000 to the IRS ($60,000 each quarter on 4/15, 6/15, 9/15, and 12/15) and expensed them per the books.

The long-term capital gain resulted from the sale of 100 shares of ABC Corp. stock on 12/31/2015 for $8,000. The long-term capital loss is from the sale of 50 shares of DEF Corp on 7/1/2015 for $2,000. Both stocks had been purchased 6/30/2014. Form 1099-B was received for these sales and it shows basis reported for both stock sales.

The corporation has an NOL carryover from 2014 in the amount of $10,000.

The corporation has filed timely all required Forms 1099.

The corporation wants any overpayment of taxes refunded; they do not want the quick refund.

The Sporting Goods Shop Inc.'s per books profit and loss statement for 2015 reflects the following debits and credits:

AccountDebitCredit

Gross sales $2,100,000

Dividends received from stock investments in less-

than-20%-owned U.S. corporations 5,000

Interest income

State bonds $ 4,000

Federal notes 6,000 10,000

Long-term capital gain 7,000

Long-term capital loss 9,000

Purchases 700,000

Life insurance premiums 10,000

Account (cont'd) DebitCredit

Salaries - officers 210,000

Salaries - clerical and sales 265,000

Taxes (payroll) 50,000

Repairs 19,000

Interest expense

Loan to purchase state bonds 3,200

Other business loans 11,800 15,000

Advertising 63,000

Charitable contributions paid in 2015 90,000

Meals and entertainment (subject to 50% limit) 16,000

Bad debt expense 5,000

Federal income tax paid and expensed 240,000

Federal income tax penalty paid 1,000

A comparative balance sheet per books reports the following information:

AssetsJan. 1, 2015Dec. 31, 2015

Cash $110,000 $371,000

Trade notes and accounts receivable 14,000 31,000

Allowance for doubtful accounts (2,000) (6,000)

Inventories 375,000 375,000

Federal bonds 115,000 220,000

State bonds 89,000 218,000

Stock investments (current assets) 614,000 670,000

Equipment and other depreciable assets 251,000 251,000

Accumulated depreciation (251,000)(251,000)

Total assets $1,315,000 $1,879,000

Liabilities and Equity

Accounts payable $65,000 $360,000

Other current liabilities 100,000 100,000

Mortgages payable (long-term) 400,000 300,000

Common stock 150,000 150,000

Retained earnings (unappropriated) 600,000969,000

Total liabilities and equity $1,315,000 $1,879,000

Required:

- Prepare and print Form 1120 for the Sporting Goods Shop, Inc. for tax year 2015, including Schedules C, D, G, J, K, L, M-1, M-2, and all accompanying statements and worksheets (Form 1125-A, Form 8949, 1125-E, and Line Explanations/Schedules).

- The print-out of the official federal tax return with all forms/statements/worksheets should total about 20 pages. This is all you will turn in on the project's due date. Write your name legibly on page one of the print-out. Do not print-out the client documents.

- Use the tax software that comes with the textbook or other tax software as long as it is for tax year 2015. Forms, schedules, and instructions are also available at the IRS website www.irs.gov. The instructions may be useful in completing the forms.

CHECK FIGURES:

Form 1120, page 1, line 11, Total Income = $1,396,000

Form 1120, page 1, line 27, Total Deductions = $703,620

Form 1120, page 1, line 30, Taxable Income = $678,880

Form 1120, page 1, line 36, Refunded = $9,181

Form 1120, page 5, Schedule L, line 15, Total Assets = $1,864,000

Form 1120, page 5, Schedule L, line 25, Retained Earnings-Unappropriated = $954,000

Form 1120, page 5, Schedule M-1, line 1, Net Income per Books = $414,000

Form 1120, page 5, Schedule M-1, line 6 = $696,380

Form 1120, page 5, Schedule M-1, line 9 = $4,000

C CORPORATION TAX RETURN PROBLEM - FALL 2016 Sam Smith (446-46-4646) and Jane Jones (312-12-1212) own and operate The Sporting Goods Shop, Inc, a retail sporting goods store. The corporation was formed on January 1, 2011. Sam is the president and owns 70 percent of the common stock while Jane is the secretary-treasurer and owns the remaining 30 percent. Both are U.S. citizens and full-time employees of the corporation and devote 100 percent of their work time to the business. Sam received a salary of $150,000 and Jane received a salary of $60,000. Other pertinent information: The corporate address is 1234 Midtown Blvd., Houston, TX 77006. The employer ID number is 76-0245100; the principal business activity is ??? (look it up in the tax software). The corporation uses the accrual method of accounting and reports on a calendar year basis. For AMT purposes, the annual gross receipts in 2014 were $2,000,000; 2013, $1,900,000; 2012, $1,500,000; 2011, $1,000,000. During 2015, the corporation distributed a cash dividend of $60,000 to Sam and Jane based on their ownership interests. It does not exceed the corporation's total earnings and profits. The corporation's estimated bad debt expense for the year was $5,000. Actual bad debts were $1,000 from delinquent customer Romney who died penniless. Equipment and other depreciable assets are fully depreciated for both tax and book purposes. Life insurance premiums were paid on term policies covering the lives of the two owners. The corporation is the beneficiary. The company took a physical count of its inventory on the last day of the year. On that date, it was determined that ending inventory was $360,000. This is not reflected in the financial statements below. Inventories are determined using the lower of cost or market method. During 2015, the corporation made timely estimated payments of $240,000 to the IRS ($60,000 each quarter on 4/15, 6/15, 9/15, and 12/15) and expensed them per the books. The long-term capital gain resulted from the sale of 100 shares of ABC Corp. stock on 12/31/2015 for $8,000. The long-term capital loss is from the sale of 50 shares of DEF Corp on 7/1/2015 for $2,000. Both stocks had been purchased 6/30/2014. Form 1099-B was received for these sales and it shows basis reported for both stock sales. The corporation has an NOL carryover from 2014 in the amount of $10,000. The corporation has filed timely all required Forms 1099. The corporation wants any overpayment of taxes refunded; they do not want the quick refund. The Sporting Goods Shop Inc.'s per books profit and loss statement for 2015 reflects the following debits and credits: Account Gross sales Dividends received from stock investments in lessthan-20%-owned U.S. corporations Interest income State bonds $ 4,000 Federal notes 6,000 Long-term capital gain Long-term capital loss Purchases Life insurance premiums Account (cont'd) Debit Credit $2,100,000 5,000 10,000 7,000 9,000 700,000 10,000 Debit Credit Salaries - officers 210,000 Salaries - clerical and sales 265,000 Taxes (payroll) 50,000 Repairs 19,000 Interest expense Loan to purchase state bonds 3,200 Other business loans 11,800 15,000 Advertising 63,000 Charitable contributions paid in 2015 90,000 Meals and entertainment (subject to 50% limit) 16,000 Bad debt expense 5,000 Federal income tax paid and expensed 240,000 Federal income tax penalty paid 1,000 A comparative balance sheet per books reports the following information: Assets Cash Trade notes and accounts receivable Allowance for doubtful accounts Inventories Federal bonds State bonds Stock investments (current assets) Equipment and other depreciable assets Accumulated depreciation Total assets Jan. 1, 2015 $110,000 14,000 (2,000) 375,000 115,000 89,000 614,000 251,000 (251,000) $1,315,000 Liabilities and Equity Accounts payable $65,000 Other current liabilities 100,000 Mortgages payable (long-term) 400,000 Common stock 150,000 Retained earnings (unappropriated) 600,000 Total liabilities and equity $1,315,000 Dec. 31, 2015 $371,000 31,000 (6,000) 375,000 220,000 218,000 670,000 251,000 (251,000) $1,879,000 $360,000 100,000 300,000 150,000 969,000 $1,879,000 Required: - Prepare and print Form 1120 for the Sporting Goods Shop, Inc. for tax year 2015, including Schedules C, D, G, J, K, L, M-1, M-2, and all accompanying statements and worksheets (Form 1125-A, Form 8949, 1125-E, and Line Explanations/Schedules). - The print-out of the official federal tax return with all forms/statements/worksheets should total about 20 pages. This is all you will turn in on the project's due date. Write your name legibly on page one of the print-out. Do not print-out the client documents. - Use the tax software that comes with the textbook or other tax software as long as it is for tax year 2015. Forms, schedules, and instructions are also available at the IRS website www.irs.gov. The instructions may be useful in completing the forms. CHECK FIGURES: Form 1120, page 1, line 11, Total Income = $1,396,000 Form 1120, page 1, line 27, Total Deductions = $703,620 Form 1120, page 1, line 30, Taxable Income = $678,880 Form 1120, page 1, line 36, Refunded = $9,181 Form 1120, page 5, Schedule L, line 15, Total Assets = $1,864,000 Form 1120, page 5, Schedule L, line 25, Retained Earnings-Unappropriated = $954,000 Form 1120, page 5, Schedule M-1, line 1, Net Income per Books = $414,000 Form 1120, page 5, Schedule M-1, line 6 = $696,380 Form 1120, page 5, Schedule M-1, line 9 = $4,000 HELPFUL HINTS ON INSTALLING THE SOFTWARE: 1. To download the software, go to www.hrblock.com/taxationtextbook2015. MAC users: www.hrblock.com/taxationtextbook2015mac. In the middle column of the first screen, you will see \"Have a coupon code?\" Type the code that comes with your 2017 edition of the Pratt/Kulsrud textbook. This code will give you a 100% discount on the $89.95 2015 Premium & Business software. Fill out the third column with your name, address, city, state, zip code, and email address. Click \"preview order\" and then \"submit order.\" You will be charged $0.00. Click \"download now\" and write down your activation code for future reference. H&R Block will also send you an e-mail with the activation code. Only one download allowed per code. 2. The software will download into your computer. It will take a few minutes to download the program. Be patient. After the download, you will install the Premium (individual) and Business (corporations, etc...) into your computer. Follow the prompts. You should now have 2 new icons on your desktop: H&R Block 2015, which is for individual returns, and H&R Block Business 2015, which is for corporate returns. In this course, you will only be preparing a C corporation return so you will be using only the H&R Block Business 2015 software, not the H&R Block 2015 software. Of course, you may install both of them if you want. 3. Click on the H&R Block 2015 icon to do an individual return and follow the prompts. To activate the software, enter the activation code from above. You do not need to set up an account with H&R Block. But you do need to update the software at this point. The software will prompt you so please tell it to update now. 4. Click on the H&R Block Business 2015 icon and follow the prompts. Click on Register Later. Next, click on Update Now. It will take a few minutes to download the updates. Be patient. Do not cancel the download. You need the latest updated software to do the corporate return. 5. Do not install any state return software. You will only be doing a Federal income tax return. 6. You may use the software that comes with the textbook or any other tax software (TurboTax, ProSeries, etc...) to which you may have access as long as it is for tax year 2015. Forms, schedules, and instructions can be found at the IRS web site www.irs.gov. Although most software programs use an interview format, the form/schedule instructions may be helpful in answering questions to complete the forms