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GROUP 3 COMPREHEN PREHENSIVE PROBLEMS 1. Olive Corporation was formed and began operations on January tion's income statement for the year and the balance sheet med and began operations on January 1, 2017. The corpora- below. ne year and the balance sheet at year-end are presented The Olive Corporation Income Statement for the Year Ended December 31, 2017 Gross income from operations Qualified dividends received from a 35 percent- $ 270,000 owned domestic corporation Total gross income 20,000 Cost of goods sold $ 290,000 Total income (110,000) Other expenses: $ 180,000 Compensation of officers Salaries and wages $77,000 Bad debts (direct charge-offs) 30,000 Repairs 9,000 Depreciation for book and tax purposes 3,000 Advertising 10,000 Payroll taxes 2,000 Total other expenses 16,000 Net income (before federal income tax expense) (147,000) $ 33,000 The Olive Corporation Balance Sheet as of December 31, 2017 Assets: Cash Accounts receivable $ 30,000 20,000 Inventory (at cost) 70,000 Equipment 90,000 Less: accumulated depreciation (10,000) Total assets Liabilities and owners' equity: $200,000 Accounts payable $ 4,550 Note payable (due in 10 years) 85,000 Common stock 80,000 Retained earnings 30,450 Total liabilities and owners' equity $200,000 The corporation made estimated tax payments of $3,000 and the corporation's federal income tax expense is equal to the federal tax liability. Complete Form 1120 for Olive Corporation on Pages 11-37 through 11-41. . 2. Assume that Olive Corporation, in Comprehensive Problem 1, is an S corporation owned 50 percent by Linda Holiday and 50 percent by Ralph Winston. The corporation is not subject to any special taxes. Using the relevant information given in Comprehen- sive Problem 1 and assuming the corporation's retained earnings are $33,000 instead of $30.450. accounts payable are $2,000 instead of $4,550, and no estimated tax payments are made, complete Form 1120S for Olive Corporation and Schedule K-1 for Linda on Pages 11-43 through 11-48. Assume there were no cash distributions during the year. GROUP 3 COMPREHEN PREHENSIVE PROBLEMS 1. Olive Corporation was formed and began operations on January tion's income statement for the year and the balance sheet med and began operations on January 1, 2017. The corpora- below. ne year and the balance sheet at year-end are presented The Olive Corporation Income Statement for the Year Ended December 31, 2017 Gross income from operations Qualified dividends received from a 35 percent- $ 270,000 owned domestic corporation Total gross income 20,000 Cost of goods sold $ 290,000 Total income (110,000) Other expenses: $ 180,000 Compensation of officers Salaries and wages $77,000 Bad debts (direct charge-offs) 30,000 Repairs 9,000 Depreciation for book and tax purposes 3,000 Advertising 10,000 Payroll taxes 2,000 Total other expenses 16,000 Net income (before federal income tax expense) (147,000) $ 33,000 The Olive Corporation Balance Sheet as of December 31, 2017 Assets: Cash Accounts receivable $ 30,000 20,000 Inventory (at cost) 70,000 Equipment 90,000 Less: accumulated depreciation (10,000) Total assets Liabilities and owners' equity: $200,000 Accounts payable $ 4,550 Note payable (due in 10 years) 85,000 Common stock 80,000 Retained earnings 30,450 Total liabilities and owners' equity $200,000 The corporation made estimated tax payments of $3,000 and the corporation's federal income tax expense is equal to the federal tax liability. Complete Form 1120 for Olive Corporation on Pages 11-37 through 11-41. . 2. Assume that Olive Corporation, in Comprehensive Problem 1, is an S corporation owned 50 percent by Linda Holiday and 50 percent by Ralph Winston. The corporation is not subject to any special taxes. Using the relevant information given in Comprehen- sive Problem 1 and assuming the corporation's retained earnings are $33,000 instead of $30.450. accounts payable are $2,000 instead of $4,550, and no estimated tax payments are made, complete Form 1120S for Olive Corporation and Schedule K-1 for Linda on Pages 11-43 through 11-48. Assume there were no cash distributions during the year
