NEED HELP

1. Calculate NIBT (Net income before tax) (per books). Use the trial balance provided. That means you must record the financial accounting entries (not any entries to arrive at taxable income per the tax return), based upon the facts given in the case.

2. Determine the book and tax permanent and timing differences. Read carefully the accompanying files!

3. Calculate taxable income begin with NIBT and add and subtract the differences in book income and taxable income. When you have done this, you will know your figure for taxable income and you can calculate the tax return tax liability.

4. Determine if each difference is a permanent or temporary difference.

5. You can now determine the book basis adjusting entry for tax expense. Remember that book tax expense is equal to the appropriate tax rate times the subtotal of NIBT plus or minus the permanent book to tax differences.

6. You should now update the book trial balance to include the book tax expense adjusting entry. In entering this adjusting entry, you should, of course, adjust any appropriate book assets or liabilities. You will have a deferred tax asset or liability created.

7. Note also: this is a pre-closing trial balance. Thus, the company?s retained earnings have not been updated. You need to calculate the ending retained earnings.

8. You should now have everything needed to complete part 1. Read again the requirements for part 1 to ensure that you follow directions. You WILL lose points if you do not follow the directions. You need to write the adjusting journal entry, you need to produce the book to tax reconciliation and then you need to produce a balance sheet to submit on Schedule L of the tax return. A format for the beginning balance sheet can be used to prepare the ending balance sheet.

9. Prepare the reconciliation to show your work arriving at taxable income per tax return from NBIT

10. Prepare your tax calculations based upon NBIT and taxable income.

11. Show the proof of your deferred tax liability calculation.

Pet Kingdom Working Trial Balance 2015 Calendar year end FACTS On November 1, 2006, Janet Morton and Kim Wong formed Pet Kingdom, Inc., to sell pets and pet supplies. Perti Pet Kingdom's business address is 1010 Northwest Parkway, Dallas, TX 75225; its telephone number is (214) 555The employer identification number is 11-1111111, 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. Both Janet and Kim are full-time employees of Pet Kingdom. Janet's Social Security number is 123-45-6789, and K Pet Kingdom is an accrual method, calendar year taxpayer. Inventories are determined using FIFO and the lower o Pet Kingdom uses the straight-line method of depreciation for book purposes and accelerated depreciation (MAC Pet Kingdom paid $250,000 in dividends during the year. Pet Kingdon paid $90,000 per quarter in federal income taxes deposits as prepaid taxes. Pet Kingdom's financial statements for 2015 are ready for preparation using the WTB tab. This is a working trial b REQUIREMENTS Complete the working trial balance including the financial statement entry for federal income taxes Show a reconcilation of the financial statement net income to financial statement pre-tax income. Show a reconciliation of financial statement pre-tax income to federal taxable income. Compute federal income taxes for financial statements (show your work) Compute Deferred income taxes payable (show your work) Compute any additional federal income taxes payable/receivable for the year 2015. Complete the federal income tax return including all schedules except form 4562. Use the depreciation given in (Download Form 1120 from IRS' website. You can type directly onto the form. I expect you to hand in a typed wr (Use the submission tab in Blackboard under the Special projects Tab to submit your special project.) The preparation of the balance sheet for the Schedule L of the tax return will be the Financial Statement Balance for Ending Retained Earnings from your WTB to get your balance sheet to balance. ell pets and pet supplies. Pertinent information regarding Pet Kingdom is summarized as follows: lephone number is (214) 555-2211; and its e-mail address is petkingdom@pki.com. vity code is 453910. ce president of the company. No other class of stock is authorized. number is 123-45-6789, and Kim's Social Security number is 987-65-4321. ned using FIFO and the lower of cost or market method. ccelerated depreciation (MACRS) for tax purposes. MACRS depreciation is $136,000 for the year 2015. TB tab. This is a working trial balance. ral income taxes re-tax income. Use the depreciation given in the facts. ect you to hand in a typed written return. DO NOT hand in a hand written return.) ur special project.) e Financial Statement Balance Sheet and can be taken from your WTB. You will need to adjust Pet Kingdom Working Trial Balance 2015 Calendar year end Description BOY Trail Balance Debits Credits Trial Balance Debits Assets Cash Trade Notes and Accounts Receivable Inventories Stock Investment State Bonds Certificates of Deposit Prepaid Federal Income tax Fedeal Income Tax Receivable Buildings and other depreciable assets Accumulated Depreciation Land Deferred Income Tax Receivable Other Assets Liabilities and Equity Accounts Payable Federal Income Taxes Payable Other Current Liabilities Deferred taxes payable Mortgages Capital Stock Retained Earnings $1,200,000 $2,062,500 $2,750,000 $1,125,000 $375,000 $400,000 $0 $1,287,750 $2,147,000 $3,030,000 $1,125,000 $375,000 $400,000 $360,000 $5,455,000 $5,455,000 $606,000 $812,500 $812,500 $140,000 $128,500 $2,284,000 $175,000 $4,625,000 $2,500,000 $4,130,000 Income Gross Sales Sales Returns and Allowances Net Sales Cost of Goods Sold Gross Prof Dividends received from stock investments in less than 20% owned U.S.Corporations Interest Income State bonds Certificates of deposit Expenses Salaries -- Officers $200,000 $2,300,000 Janet Morton Kim Wong 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 Depreciation* Charitable Contributions Emplyee Benefit programs Premiums on term life insurance Policies on lives of Janet Morton and Kim Wong; Pet Kingdom is the designated beneficiary Income tax expense Totals Net Income For Financial Statement Purposes Net Income Per Financial statements Plus Federal Income Tax Pre tax Income Plus, minus: Permanent differences Taxable Income per books Taxable income per tax return $262,500 $262,500 $725,000 $238,000 $140,000 $9,000 $207,000 $58,000 $109,000 $106,000 $38,000 $60,000 $40,000 $14,320,000 $14,320,000 $19,875,750 Trial Balance Credits $712,000 $1,975,000 $155,000 $4,575,000 $2,500,000 $4,130,000 $5,750,000 $43,750 $15,000 $20,000 Adjustments Debits Credits Income Statement Debits Credits Balance Sheet Debits Credits $19,875,750 Balance Sheet January 1, 2015 Debits Credits $1,200,000 $2,062,500 $2,750,000 $1,125,000 $375,000 $400,000 $0 $0 $5,455,000 $606,000 $812,500 $140,000 $2,284,000 $175,000 $14,320,000 $4,625,000 $2,500,000 $4,130,000 $14,320,000 Pet Kingdom Working Trial Balance 2015 Calendar year end Description Adjusting Journal Entries Debits Credits