Note: This problem is for the 2018 tax year. On February 12, 2005, Nancy Trout and Delores Lake formed Kingfisher Corporation to sell fishing tackle. Pertinent information regarding Kingfisher is summarized as follows: Kingfisher's business address is 1717 Main Street, Ely, Mn 55731; its telephone number is (218) 555-2211; and its e-mail address is kingfisher@kf.com The employer identification number is 11-1111113, and the principal business activity code is 451110 Nancy owns 50% of the common stock and is president of the company, and Delores owns 50% of the common stock and is vice president of the company. No other class of stock is authorized. Both Nancy and Delores are full-time employees of Kingfisher. Nancy's Social Security number is 123-45-6788, and Delores's Social Security number is 123-45-6787. Kingfisher is an accrual method, calendar year taxpayer. Inventories are determined using FIFO and the lower of cost or market method. Kingfisher uses the straight-line method of deprecation for book purposes and accelerated depreciation (MACRS) for tax purposes During 2018, the corporation distributed cash dividends of $80,000. Kingfisher's financial statements for 2018 are shown below and on the next page Income Statement Income Gross sales $2,408,000 Sales returns and allowances (80,000) Net sales $2,328,000 Cost of goods sold (920,000) Gross profit $1,408,000 Dividends received from stock investments in less-than-20%- owned U.S. corporations 12,000 Interest income: State bonds $14,000 Certificates of deposit 10,000 24,000 Total income $1,444,000 Expenses Salaries-officers Nancy Trout $160,000 Delores Lake $320,000 160,000 Salaries-clerical and sales 290,000 Taxes (state, local, and payroll) 85,000 Repairs and maintenance 56,000 Interest expense: Business loans $12,000 8,000 Loan to purchase state bonds 20,000 Advertising 6,000 Rental expense 68,000 Depreciation* 40,000 Charitable contributions 15,000 Employee benefit programs 24,000 Premiums on term life insurance policies on lives of Janet Morton and Kim Wong; Pet Kingdom is the designated beneficiary 16,000 Total expenses (940,000) Net income before taxes $504,000 Federal income tax (106,680) Net income per books $397,320 You are not provided enough detailed information to complete a Form 4562 (depreciation). If you solve this problem using Intuit ProConnect, enter the amount of deprecation on line 20 of Form 1120 Balance Sheet January 1, 2018 December 31, 2018 Assets Cash $380,000 $337,300 Trade notes and accounts receivable 308,400 480,280 Inventories 900,000 1,012,000 State bonds 160,000 160,000 Federal income tax refund 1,320 -0- Certificates of deposit 140,000 140,000 Stock investments 300,000 300,000 Buildings and other depreciable assets 240,000 240,000 Accumulated depreciation (88,000) (128,800) Land 20,000 20,000 Other assets 3,600 2,000 $2,363,200 $2,564,100 Total assets Liabilities and Equity December 31, 2018 January 1, 2018 Accounts payable $300,000 $233,880 Other current liabilities 80,300 40,000 Mortgages 210,000 200,000 Capital stock 500,000 500,000 Retained earnings 1,272,900 1,590,220 Total liabilities and equity $2,363,200 $2,564,100 Required: During 2018, Kingfisher made estimated tax payments of $27,000 each quarter to the IRS. Prepare a Form 1120 for Kingfisher for tax year 2018 If an amount box does not require an entry or the answer is zero, enter "O" Enter all amounts as positive numbers, unless otherwise instructed. If required, round amounts to the nearest dollar. Make realistic assumptions about any missing data. Prepare Form 1125E for Kingfisher Corporation for tax year 2018 Form 1125-E Compensation of Officers (Rev. October 2016) Attach to Form 1120, 1120-C, 1120-F, 1120-REIT, 1120-RIC, or 1120s OMB No. 1545-0123 Department of the Treasury Information about Form 1125-E and its separate instructions is at Internal Revenue Service www.irs.gov/form1125e. Employer identification number Name Kingfisher Corporation 11-1111113 Note: Complete Form 1125-E only if total receipts are $500,000 or more. See instructions for definition of total receipts. (c) Percent of Percent of stock owned (b) Social security (f) Amount of (a) Name of officer time devoted to number compensation (d) Common (e) Preferred business Nancy Trout 123-45-6788 % % % Delores Lake 123-45-6789 % % % % % % % % % % % % % % % % % % % % 9% 9% 96 96 26 2 Total compensation of officers 2 3 Compensation of officers claimed on Form 1125-A or elsewhere on return 3 4 Subtract line 3 from line 2. Enter the result here and on Form 1120, page 1, line 12 or the appropriate line of your tax return...... .. :** 4 BAA For Paperwork Reduction Act Notice, see separate instructions. Form 1125-E (Rev. 10-2016) Note: This problem is for the 2018 tax year. On February 12, 2005, Nancy Trout and Delores Lake formed Kingfisher Corporation to sell fishing tackle. Pertinent information regarding Kingfisher is summarized as follows: Kingfisher's business address is 1717 Main Street, Ely, Mn 55731; its telephone number is (218) 555-2211; and its e-mail address is kingfisher@kf.com The employer identification number is 11-1111113, and the principal business activity code is 451110 Nancy owns 50% of the common stock and is president of the company, and Delores owns 50% of the common stock and is vice president of the company. No other class of stock is authorized. Both Nancy and Delores are full-time employees of Kingfisher. Nancy's Social Security number is 123-45-6788, and Delores's Social Security number is 123-45-6787. Kingfisher is an accrual method, calendar year taxpayer. Inventories are determined using FIFO and the lower of cost or market method. Kingfisher uses the straight-line method of deprecation for book purposes and accelerated depreciation (MACRS) for tax purposes During 2018, the corporation distributed cash dividends of $80,000. Kingfisher's financial statements for 2018 are shown below and on the next page Income Statement Income Gross sales $2,408,000 Sales returns and allowances (80,000) Net sales $2,328,000 Cost of goods sold (920,000) Gross profit $1,408,000 Dividends received from stock investments in less-than-20%- owned U.S. corporations 12,000 Interest income: State bonds $14,000 Certificates of deposit 10,000 24,000 Total income $1,444,000 Expenses Salaries-officers Nancy Trout $160,000 Delores Lake $320,000 160,000 Salaries-clerical and sales 290,000 Taxes (state, local, and payroll) 85,000 Repairs and maintenance 56,000 Interest expense: Business loans $12,000 8,000 Loan to purchase state bonds 20,000 Advertising 6,000 Rental expense 68,000 Depreciation* 40,000 Charitable contributions 15,000 Employee benefit programs 24,000 Premiums on term life insurance policies on lives of Janet Morton and Kim Wong; Pet Kingdom is the designated beneficiary 16,000 Total expenses (940,000) Net income before taxes $504,000 Federal income tax (106,680) Net income per books $397,320 You are not provided enough detailed information to complete a Form 4562 (depreciation). If you solve this problem using Intuit ProConnect, enter the amount of deprecation on line 20 of Form 1120 Balance Sheet January 1, 2018 December 31, 2018 Assets Cash $380,000 $337,300 Trade notes and accounts receivable 308,400 480,280 Inventories 900,000 1,012,000 State bonds 160,000 160,000 Federal income tax refund 1,320 -0- Certificates of deposit 140,000 140,000 Stock investments 300,000 300,000 Buildings and other depreciable assets 240,000 240,000 Accumulated depreciation (88,000) (128,800) Land 20,000 20,000 Other assets 3,600 2,000 $2,363,200 $2,564,100 Total assets Liabilities and Equity December 31, 2018 January 1, 2018 Accounts payable $300,000 $233,880 Other current liabilities 80,300 40,000 Mortgages 210,000 200,000 Capital stock 500,000 500,000 Retained earnings 1,272,900 1,590,220 Total liabilities and equity $2,363,200 $2,564,100 Required: During 2018, Kingfisher made estimated tax payments of $27,000 each quarter to the IRS. Prepare a Form 1120 for Kingfisher for tax year 2018 If an amount box does not require an entry or the answer is zero, enter "O" Enter all amounts as positive numbers, unless otherwise instructed. If required, round amounts to the nearest dollar. Make realistic assumptions about any missing data. Prepare Form 1125E for Kingfisher Corporation for tax year 2018 Form 1125-E Compensation of Officers (Rev. October 2016) Attach to Form 1120, 1120-C, 1120-F, 1120-REIT, 1120-RIC, or 1120s OMB No. 1545-0123 Department of the Treasury Information about Form 1125-E and its separate instructions is at Internal Revenue Service www.irs.gov/form1125e. Employer identification number Name Kingfisher Corporation 11-1111113 Note: Complete Form 1125-E only if total receipts are $500,000 or more. See instructions for definition of total receipts. (c) Percent of Percent of stock owned (b) Social security (f) Amount of (a) Name of officer time devoted to number compensation (d) Common (e) Preferred business Nancy Trout 123-45-6788 % % % Delores Lake 123-45-6789 % % % % % % % % % % % % % % % % % % % % 9% 9% 96 96 26 2 Total compensation of officers 2 3 Compensation of officers claimed on Form 1125-A or elsewhere on return 3 4 Subtract line 3 from line 2. Enter the result here and on Form 1120, page 1, line 12 or the appropriate line of your tax return...... .. :** 4 BAA For Paperwork Reduction Act Notice, see separate instructions. Form 1125-E (Rev. 10-2016)