Homework Assignment Tax Returns

Accounting 406

Due at the beginning of class 4/20

Prepare a complete year 2019 federal corporate tax return for Acme Corporation.

Balance Sheet1/1/1912/31/19

Cash20,000 500,000

Investments 80,000

Accounts Receivable100,000

Equipment (less depreciation of $10,000) 20,000

Total Assets20,000700,000

Accounts Payable180,000

Common Stock20,000 20,000

Retained Earnings500,000

Total Liab. And Equity20,000700,000

Income Statement

Sales 1,080,000

Tax exempt interest 10,000

Dividends Received on Apple Stock 50,000

Salaries and Wages (420,000)

Supplies and materials (70,000)

Meals (60,000)

Depreciation (10,000)

Charitable contributions (80,000)

Book Income 500,000

Other Information

You are the sole shareholder of Acme Corporation.

Please note that the financial statements have already been issued using the information above and will not be amended.

You formed Acme by contributing $20,000 to the corporation in return for 1 share of stock on 1/01/19. You named yourself to the role of President and every other officer position. Your Acme salary for the year 2019 was $240,000. (This is included in the salary amount reported on the income statement.) Running Acme is your full time job.

Acmes sole depreciable asset was equipment purchased on 1/01/19 for $30,000. For tax purposes, you will maximize the depreciation expense.

Acme also received a 2019 K-1 for a partnership interest it owned during the year. The K-1 showed ordinary income of $20,000 and interest income of $14,000. No partnership income was recorded on the financial statements.

Acme owns less than 1% of Apple stock outstanding.

Acme has no cost of goods sold.

Please make up appropriate non-financial information that is not included above (e.g., address, etc.).

IRS forms can be obtained at: http://www.irs.gov/formspubs/

Extra Credit To potentially assist in improving ones grade to a C or D .

Complete an entirely separate year 2019 tax return for Acme Corporation if an S election was made 1/1/19..