Instructions Form 1120, pages 1, 2 and 3 Form 1120, pages 4, 5 and 6 W Instructions Note: This problem is for the 2018 tax year. On November 1, 2008, Janet Morton and Kim Wong formed Pet Kingdom, Inc., to sell pets and pet supplies. Pertinent information regarding Pet Kingdom is summarized as follows. Pet Kingdom's business address is 1010 Northwest Parkway, Dallas, TX 75225; its telephone number is (214) 555-2211; and its e-mail address is petkingdompki.com. The employer identification number is 11-1111112, and the principal business activity code is 453910. Janet and Kim each own 50% of the common stock: Janet is president and Kim is vice president of the company. No other class of stock is authorized Both Janet and Kim are full-time employees of Pet Kingdom. Janet's Social Security number is 123-45-6788, and Kim's Social Security number is 123-45-6787. Pet Kingdom is an accrual method, calendar year taxpayer. Inventories are determined using FIFO and the lower of cost or market method. Pet Kingdom uses the straight-line method of depreciation for book purposes and accelerated depreciation (MACRS) for tax purposes. . During 2018, the corporation distributed cash dividends of $250,000. Pet Kingdom's financial statements for 2018 are shown below. Income Statement $5,750,000 (200,000) $5,550,000 (2,300,000) $3,250,000 43,750 $15,000 20,000 Income Gross sales Sales returns and allowances Net sales Cost of goods sold Gross profit Dividends received from stock investments in less than 20%- owned U.S. corporations Interest income: State bonds Certificates of deposit Total income Expenses Salaries--officers: Janet Morton Kim W4 CM Salaries-clerical and sales Taxes (state, local, and payroll) Repairs and maintenance Interest expense: Loan to purchase state bonds Other business loans Advertising Rental expense 35,000 $3,328,750 $262,500 262,500 $525,000 725,000 238,000 140,000 $9,000 207,000 216,000 58,000 109,000 Feedback 40,000 structions designated benenciary otal expenses et income before taxes ederal income tax Het income per books (2,255,000) $1,073,750 (221,734) $852,016 Depreciation for tax purposes is $136,000. You are not provided enough detailed data to complete a Form 4562 (depreciation). If you solve this problem using Intuit ProConnect, enter the amount of depreciation on line 20 of Form 1120. Balance Sheet January 1, 2018 $1,200,000 2,062,500 2,750,000 1,125,000 375,000 400,000 Assets Cash Trade notes and accounts receivable Inventories Stock investment State bonds Certificates of deposit Prepaid Federal tax Buildings and other depreciable assets Accumulated depreciation Land Other assets Total assets December 31, 2018 $1,039,461 2,147,000 3,030,000 1,125,000 375,000 400,000 2,266 5,455,000 (712,000) 812,500 128,500 $13,802,727 5,455,000 (606,000) 812,500 140,000 $13,714,000 Liabilities and Equity Accounts payable Other current liabilities Mortgages Capital stock Retained earnings Total liabilities and equity Required: January 1, 2018 $2,284,000 175,000 4,625,000 2,500,000 4,130,000 $13,714,000 December 31, 2018 $1,840,711 155,000 4,575,000 2,500,000 4,732,016 $13,802,727 During 2018, Pet Kingdom made estimated tax payments of $56,000 each quarter to the IRS. Prepare a Form 1120 for Pet Kingdom for tax year 2018 . If an amount box does not require an entry or the answer is zero, enter "0". Enter all amounts as positive numbers, unless otherwise instructed. If required, round amounts to the nearest dollar. ose X 2019 instructions for Form 11 x 26abledd-b6dd-451-6564 x Jake Assignment Main.do?invokere&takeAssignmentSessionLocator Sinprogress false Print Item lons Form 1120, pages 1, 2 and 3 Form 1120 pages 4.5 and Form 1125 A Schedule Schedule M 3 Form 11 pages 1, 2 and 3 c Add lines 29 and 29 ...... 21,875 10 Taxable income. Subtract line 29c from line 28. See Instructions 346,075 360,000 X 11 Total tax (Schedule), Part I, line 11). 32 2018 net 965 tax liability paid (Schedule ), Part II, line 12).... 33 Total payments, credits, and section 965 net tax liability (Schedule, Part II, line 23) 34 Estimated tax penalty. See instructions. Check if Form 2220 is attached..... 35 Amount owed. I line 33 is smaller than the total of lines 31, 32, and 34, enter amount owed 36 Overpayment. If line 33 is larger than the total of lines 31, 32, and 34, enter amount overpaid 3,977 X 37 Enter amount from line 36 you want: Credited to 2019 estimated tax Refunded 3,977 Under penalts of perjury, I declare that I have examined this return, including accompanying schedules and statements, and to the best of my knowledge and belief, it is true, correct, and complete. Declaration of preparer (other than taxpayer) is based on all information of which preparer has any knowledge. President May the IRS discuss this return with the preparer shown below? Signature of officer Date See instructions. Yes No Title Print/Type preparer's name Preparer's signature PTIN Check of self- employed Firm's EIN parer Firm's name Only Firm's address Phone no. aperwork Reduction Act Notice, see separate instructions. BAA Cat. No. 114500 Form 1120 (2018) Page 1 1120 (2018) dulec Dividends, Inclusions, and Special Deductions (see instructions) (a) Dividends and Inclusions (b) (c) Special deduction (a) (b) 43,750 21,875 Dividends from less than 20%-owned domestic corporations (other than debt financed stock)........... Dividends from 20%-or-more-owned domestic corporations (other than debt- financed stock)... see Dividends on certain debt-financed stock of domestic and foreign corporations instructions ile utilities 1120, pages 1, 2 and 3 pedule 3 Tax Computation and Payment (see instructions) rt I-Tax Computation Check if the corporation is a member of a controlled group (attach Schedule O (Form 1120)). See instructions. 2 Income tax. See instructions ........ 356,023 3 4 Base erosion minimum tax (attach Form 8991)..... Add lines 2 and 3 ..... 5a Foreign tax credit (attach Form 1118)........... b Credit from Form 8834 (see instructions)......... c General business credit (attach Form 3800)...... d Credit for prior year minimum tax (attach Form 8827)....... e Bond credits from Form 8912......... 6 Total credits. Add lines 5a through 5e ..................... 7 Subtract line 6 from line 4.. 8 Personal holding company tax (attach Schedule PH (Form 1120))... 9a Recapture of investment credit (attach torm 4255).. b Recapture of low-income housing credit (attach Form 8611).............. c Interest due under the look back method-completed long-term contracts (attach Form 8697)..... d Interest due under the look back method-income forecast method (attach Form 8866) ....... .. .. ...... e Alternative tax on qualifying shipping activities (attach Form 8902) ........ f Other (see instructions-attach statement)... 10 Total. Add lines 9a through 91 ............... 11 Total tax. Add lines 7, 8, and 10. Enter here and on page 1, line 31 .. Part II-Section 965 Payments (see instructions) 12 2018 net 965 tax liability paid from Form 965-B, Part II, column (k), line 2. Enter here and on page 1, line 32 Part III-Payments, Refundable Credits, and Section 965 Net Tax Liability 13 2017 overpayment credited to 2018............... 14 2018 estimated tax payments ................ 15 2018 refund applied for on Form 4466 ...... iterest due under the look-back method-income forecast method (attach Form 866) ..... ... Alternative tax on qualifying shipping activities (attach Form 8902)...... ther (see instructions-attach statement) ............ Total. Add lines 9a through 9f . . . . . . . . . . . . . . . . . . . . . . . . . ....... Total tax. Add lines 7, 8, and 10. Enter here and on page 1, line 31 .... II-Section 965 Payments (see instructions) 2018 net 965 tax liability paid from Form 965-B, Part II, column (k), line 2. Enter here and on page 1, line 32 III-Payments, Refundable Credits, and Section 965 Net Tax Liability 2017 overpayment credited to 2018............................ 2018 estimated tax payments ......... 2018 refund applied for on Form 4466....... Combine lines 13, 14, and 15 ........... 7 Tax deposited with Form 7004............ Withholding (see instructions) .............. 8 .9 Total payments. Add lines 16, 17, and 18. 20b 20 Refundable credits from: a Form 2439........... 20a b Form 4136 ................... c Form 8827, line 8c .......................... 200 d Other (attach statement-see instructions).......... 21 Total credits. Add lines 20a through 20d .......... 22 2018 net 965 tax liability from Form 965-B, Part I, column (d), line 2. See Instructions .......... 23 Total payments, credits, and section 965 net tax liability. Add lines 19, 21, and 22. Enter here and on page 1, line 33......... .... . . . ... 200 RN Form 1120 (2018) Feedback Instructions Form 1120, pages 1, 2 and 3 Form 1120, pages 4, 5 and 6 W Instructions Note: This problem is for the 2018 tax year. On November 1, 2008, Janet Morton and Kim Wong formed Pet Kingdom, Inc., to sell pets and pet supplies. Pertinent information regarding Pet Kingdom is summarized as follows. Pet Kingdom's business address is 1010 Northwest Parkway, Dallas, TX 75225; its telephone number is (214) 555-2211; and its e-mail address is petkingdompki.com. The employer identification number is 11-1111112, and the principal business activity code is 453910. Janet and Kim each own 50% of the common stock: Janet is president and Kim is vice president of the company. No other class of stock is authorized Both Janet and Kim are full-time employees of Pet Kingdom. Janet's Social Security number is 123-45-6788, and Kim's Social Security number is 123-45-6787. Pet Kingdom is an accrual method, calendar year taxpayer. Inventories are determined using FIFO and the lower of cost or market method. Pet Kingdom uses the straight-line method of depreciation for book purposes and accelerated depreciation (MACRS) for tax purposes. . During 2018, the corporation distributed cash dividends of $250,000. Pet Kingdom's financial statements for 2018 are shown below. Income Statement $5,750,000 (200,000) $5,550,000 (2,300,000) $3,250,000 43,750 $15,000 20,000 Income Gross sales Sales returns and allowances Net sales Cost of goods sold Gross profit Dividends received from stock investments in less than 20%- owned U.S. corporations Interest income: State bonds Certificates of deposit Total income Expenses Salaries--officers: Janet Morton Kim W4 CM Salaries-clerical and sales Taxes (state, local, and payroll) Repairs and maintenance Interest expense: Loan to purchase state bonds Other business loans Advertising Rental expense 35,000 $3,328,750 $262,500 262,500 $525,000 725,000 238,000 140,000 $9,000 207,000 216,000 58,000 109,000 Feedback 40,000 structions designated benenciary otal expenses et income before taxes ederal income tax Het income per books (2,255,000) $1,073,750 (221,734) $852,016 Depreciation for tax purposes is $136,000. You are not provided enough detailed data to complete a Form 4562 (depreciation). If you solve this problem using Intuit ProConnect, enter the amount of depreciation on line 20 of Form 1120. Balance Sheet January 1, 2018 $1,200,000 2,062,500 2,750,000 1,125,000 375,000 400,000 Assets Cash Trade notes and accounts receivable Inventories Stock investment State bonds Certificates of deposit Prepaid Federal tax Buildings and other depreciable assets Accumulated depreciation Land Other assets Total assets December 31, 2018 $1,039,461 2,147,000 3,030,000 1,125,000 375,000 400,000 2,266 5,455,000 (712,000) 812,500 128,500 $13,802,727 5,455,000 (606,000) 812,500 140,000 $13,714,000 Liabilities and Equity Accounts payable Other current liabilities Mortgages Capital stock Retained earnings Total liabilities and equity Required: January 1, 2018 $2,284,000 175,000 4,625,000 2,500,000 4,130,000 $13,714,000 December 31, 2018 $1,840,711 155,000 4,575,000 2,500,000 4,732,016 $13,802,727 During 2018, Pet Kingdom made estimated tax payments of $56,000 each quarter to the IRS. Prepare a Form 1120 for Pet Kingdom for tax year 2018 . If an amount box does not require an entry or the answer is zero, enter "0". Enter all amounts as positive numbers, unless otherwise instructed. If required, round amounts to the nearest dollar. ose X 2019 instructions for Form 11 x 26abledd-b6dd-451-6564 x Jake Assignment Main.do?invokere&takeAssignmentSessionLocator Sinprogress false Print Item lons Form 1120, pages 1, 2 and 3 Form 1120 pages 4.5 and Form 1125 A Schedule Schedule M 3 Form 11 pages 1, 2 and 3 c Add lines 29 and 29 ...... 21,875 10 Taxable income. Subtract line 29c from line 28. See Instructions 346,075 360,000 X 11 Total tax (Schedule), Part I, line 11). 32 2018 net 965 tax liability paid (Schedule ), Part II, line 12).... 33 Total payments, credits, and section 965 net tax liability (Schedule, Part II, line 23) 34 Estimated tax penalty. See instructions. Check if Form 2220 is attached..... 35 Amount owed. I line 33 is smaller than the total of lines 31, 32, and 34, enter amount owed 36 Overpayment. If line 33 is larger than the total of lines 31, 32, and 34, enter amount overpaid 3,977 X 37 Enter amount from line 36 you want: Credited to 2019 estimated tax Refunded 3,977 Under penalts of perjury, I declare that I have examined this return, including accompanying schedules and statements, and to the best of my knowledge and belief, it is true, correct, and complete. Declaration of preparer (other than taxpayer) is based on all information of which preparer has any knowledge. President May the IRS discuss this return with the preparer shown below? Signature of officer Date See instructions. Yes No Title Print/Type preparer's name Preparer's signature PTIN Check of self- employed Firm's EIN parer Firm's name Only Firm's address Phone no. aperwork Reduction Act Notice, see separate instructions. BAA Cat. No. 114500 Form 1120 (2018) Page 1 1120 (2018) dulec Dividends, Inclusions, and Special Deductions (see instructions) (a) Dividends and Inclusions (b) (c) Special deduction (a) (b) 43,750 21,875 Dividends from less than 20%-owned domestic corporations (other than debt financed stock)........... Dividends from 20%-or-more-owned domestic corporations (other than debt- financed stock)... see Dividends on certain debt-financed stock of domestic and foreign corporations instructions ile utilities 1120, pages 1, 2 and 3 pedule 3 Tax Computation and Payment (see instructions) rt I-Tax Computation Check if the corporation is a member of a controlled group (attach Schedule O (Form 1120)). See instructions. 2 Income tax. See instructions ........ 356,023 3 4 Base erosion minimum tax (attach Form 8991)..... Add lines 2 and 3 ..... 5a Foreign tax credit (attach Form 1118)........... b Credit from Form 8834 (see instructions)......... c General business credit (attach Form 3800)...... d Credit for prior year minimum tax (attach Form 8827)....... e Bond credits from Form 8912......... 6 Total credits. Add lines 5a through 5e ..................... 7 Subtract line 6 from line 4.. 8 Personal holding company tax (attach Schedule PH (Form 1120))... 9a Recapture of investment credit (attach torm 4255).. b Recapture of low-income housing credit (attach Form 8611).............. c Interest due under the look back method-completed long-term contracts (attach Form 8697)..... d Interest due under the look back method-income forecast method (attach Form 8866) ....... .. .. ...... e Alternative tax on qualifying shipping activities (attach Form 8902) ........ f Other (see instructions-attach statement)... 10 Total. Add lines 9a through 91 ............... 11 Total tax. Add lines 7, 8, and 10. Enter here and on page 1, line 31 .. Part II-Section 965 Payments (see instructions) 12 2018 net 965 tax liability paid from Form 965-B, Part II, column (k), line 2. Enter here and on page 1, line 32 Part III-Payments, Refundable Credits, and Section 965 Net Tax Liability 13 2017 overpayment credited to 2018............... 14 2018 estimated tax payments ................ 15 2018 refund applied for on Form 4466 ...... iterest due under the look-back method-income forecast method (attach Form 866) ..... ... Alternative tax on qualifying shipping activities (attach Form 8902)...... ther (see instructions-attach statement) ............ Total. Add lines 9a through 9f . . . . . . . . . . . . . . . . . . . . . . . . . ....... Total tax. Add lines 7, 8, and 10. Enter here and on page 1, line 31 .... II-Section 965 Payments (see instructions) 2018 net 965 tax liability paid from Form 965-B, Part II, column (k), line 2. Enter here and on page 1, line 32 III-Payments, Refundable Credits, and Section 965 Net Tax Liability 2017 overpayment credited to 2018............................ 2018 estimated tax payments ......... 2018 refund applied for on Form 4466....... Combine lines 13, 14, and 15 ........... 7 Tax deposited with Form 7004............ Withholding (see instructions) .............. 8 .9 Total payments. Add lines 16, 17, and 18. 20b 20 Refundable credits from: a Form 2439........... 20a b Form 4136 ................... c Form 8827, line 8c .......................... 200 d Other (attach statement-see instructions).......... 21 Total credits. Add lines 20a through 20d .......... 22 2018 net 965 tax liability from Form 965-B, Part I, column (d), line 2. See Instructions .......... 23 Total payments, credits, and section 965 net tax liability. Add lines 19, 21, and 22. Enter here and on page 1, line 33......... .... . . . ... 200 RN Form 1120 (2018) Feedback