Here are the guidelines for the project:

Based on the given information Form 4797. Also, provide calculations for Jon and Billy's basis inBizrate'sstock and Bizrate basis in the new assets it holds. Depreciation will be a given number.

Your team will create presentation that supports the calculations and research completed during the project covered in all applicableCOs.

The PowerPoint must be at least 7 slides long properly formatted using APA citations where appropriate.

Your grade will be based on the group tax return and group PowerPoint presentation.

If you are taking this class online, your presentation will be narrated via PowerPoint by your group. If you are taking this class on-campus, your presentation will be live in class Week 8

BizrateElectronicswas organized on February 22, 2018, byJon JonesandBillyBurt.Joncontributed $270,000 cash andSBUXstock(acquired 01/01/2017)worth $30,000 for 60% ofBizratestock,whileBillycontributed $200,000 cash for 40% of the stock.Jon's social security number is123-45-6789andBilly's is987-65-4321.Bizrate'semployer ID number is12-3456789.Bizratebegan business on March 1, 2018.Bizrateis a retailelectronicsoutlet located at118812 Josey Lane,Louisville,KY40018.Bizrateuses the accrual method of accounting, the first-in, first-out (FIFO) inventory method, and a calendar year.

Bizrate's2018income statement, balance sheet, and statement of changes in retained earnings are on the

Sales

4,700,000

Returns and Allowances

(50,000)

4,650,000

Beginning Inventory

0

Purchases

4,050,000

4,050,000

Ending Inventory

(1,700,000)

(2,350,000)

Gross Profit

2,300,000

Expenses

Salaries(a)

980,000

Depreciation(b)

75,400

Advertising

30,000

Bad Debts

39,000

Rent

100,000

Interest(c)

39,500

Utilities

38,300

Delivery Expense

34,900

Office Supplies

46,200

Repairs and Maintenance

29,000

Organization Expense(d)

6,000

Meals and Entertainment

80,000

Insurance Expense(e)

36,000

Payroll Taxes

113,300

2018Federal Income Tax Deposits

250,000

Other Taxes

20,000

Fines and Penalties (Traffic)

1,000

Accounting and Legal

12,000

Charitable Contributions - Red Cross

18,000

Real Estate Taxes on Investment Land

800

1,949,400

350,600

Other Income

Gain on Sale of Stock(f)

4,000

Sale of Delivery Truck(g)

8,600

Interest on County Tax Exempt Bonds

1,100

Interest on CDs

11,500

Dividends from US Corporations(h)

5,600

30,800

Net Income

381,400

a.Includes salaries:Jon Jones$200,000,Billy Burt$50,000.

b.Depreciation for tax purposes $112,700.

c.$2,500 is allocable to the investments in stock.The remainder is related toBizrate'sbusiness.

d.$6,000 in fees were incurred in organizingBizrate.

e.Includes $5,000 of premiums for term life insurance onJonandBilly.Bizrateis the beneficiary of these policies.In addition, $4,300 of the health insurance premiums are attributable to coverage forJonand hisfamily, and $3,900 are attributable to coverage forBillyand his family.

f.Sold 500 shares ofSBUXstock for $35,000on December 1, 2018.The stock had been purchased byJonon July 1, 2004 for $20,000 and was contributed by him on February 22, 2018, when it was worth $30,000.Also, on December 1, 2018sold 100 shares of Grand View, Inc. for $2,000.The stock had been purchased on March 1, 2018for $3,000.At no time didBizrateown more than 1% of the outstanding stock of these corporations.

g.Sold a delivery truck on September 23, 2018for $35,000.The Truck hadoriginallybeen purchased on May 1, 2018for $33,400.Depreciation taken for book purposes was $7,000.Depreciation taken for tax purposes was $9,350.

h.Bizrateowns less than 20% of the outstanding stock of each of these corporations.

Assets

Cash

113,000

Accounts Receivable

300,000

Less Allowance for Bad Debts

29,000

271,000

Inventory

1,700,000

Tax Exempt Securities

17,000

Other Current Assets

40,000

Other Investments

85,000

Buildings and Depreciable Assets (net)

165,400

Land

70,000

Total Assets

2,461,400

Liabilities and Equity

Accounts Payable

375,000

Mortgages, Notes Payable in < 1 year

185,000

Other Current Liabilities

70,000

Mortgages, Notes Payable in > 1 year

1,190,000

Capital Stock

500,000

Retained Earnings

141,400

Total Liabilities and Equity

2,461,400

Beginning Balance

0

Income

381,400

Distributions

(240,000)

Balance, December 31, 2018

141,400

Other Information

Addresses for the owners are:

Jon Jones,3513 Jackson Street,Louisville, KY 40018

Billy Burt, 2532 Sugarbush, Louisville, KY 40018

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