On March 1, 2000, Ben Johnson and Mark Smith formed Jack's Flooring Company UFC) to sell flooring. The company also offers customers flooring installation services as well. The following information is relevant to the case: The business address is 1000 N. Hunters Rd, Cincinnati, Ohio 45280. Its telephone number is (937) 555-2234 and its e-mail address is customersales@jfc.com. The employer identification number is 35-8756123. The principal business activity code is Both Ben and Mark each own an equal share of the outstanding common stock; no other class of stock is authorized Ben (226-96-7454) is the President and Mark (155-11-2698) is Vice President. Each serve the company in a full time position and have a salary of $90,000. Ben's address is 7856 Town Rd, Cincinnati, Ohio 45280. Mark's address is 437 Hamilton Rd, Cincinnati, Ohio 45280. The corporation uses the accrual method of accounting and follows GAAP, the company reports on a calendar basis. Inventories are determined using FIFO and the lower of cost or market method. JFC has never changed its inventory method or written down any subnormal goods. The rules of Section 263A (UNICAP) do not apply to JFC. The specific charge-off method is used in handling bad debts, and JFC wrote off $25,000 in accounts receivable as uncollectible during the year. JFC did not receive any assets in Section 351 transfers during the year For book purposes, the straight-line method of depreciation is used, while for tax purposes, MACRS depreciation is used. (Note: depreciation should be entered on Line 17 of Form 4562 in ProConnect). During the year, the corporation was required to file Forms 1099 and did file them in a timely manner. During the year, JFC contributed $50,000 to American Red Cross. JFC purchased 1,500 shares of Home Depot Inc. stock on October 10, 2005 for $63,000 (including commission) On July 10, of the current year, JFC sold 500 shares of Home Depot Inc. for $100,000 (including commission) JFC received a 1099-B reporting the sale proceeds. Box 6b was checked on the Form 1099-B, During the year, JFC Corporation made timely quarterly income tax deposits to the IRS of $19,000, During the year, the corporation distributed a cash dividend of $60,000 A comparative balance sheet for JFC reveals the following information Assets $ 1/1 752,540 682,500 (180,000) 1,330,000 250,000 40,000 50,000 12/31 1,055,710 251,500 (172,500) 1,246,500 150,000 Tradie notes and accounts receivable Less: Allowance for doubtful accounts Inventories Stock investments State bonds Certificates of deposit Prepaid federal tax Buildings and other depreciable assets Accumulated depreciation Land Other assets Total assets 40,000 50,000 580,500 (166,150) 341,250 22,300 3,702,940 1,665 580,500 (196,650) 341,250 15,900 3,363,875 $ $ 1/1 S Liabilities and Equity Accounts payable Sales tax payable Salaries payable Payroll taxes payable Interest payable Mortgages (long-term) Capital stock Retained earnings (unappropriated) Total liabilities and equity 545,260 18,500 29,750 10,530 12,500 1,487,000 800,000 799,400 3,702,940 12/31 115,960 15,230 40,780 13,240 21,610 1,350,490 800,000 1,006,565 3,363,875 $ $ erected portions of JFC's profit and loss statement reflect the following 4,800,000 300,000 2,890,000 8,900 2,600 5,000 15,000 650,000 35,000 82,000 26,000 18,500 Account Gross Sales Sales returns and allowances Cost of goods sold Dividends received from stock investments in less-than-20% owned US Corporations Interest Income State bonds Certificates of Deposit Premiums on term life insurance policies on the lives of the officers; JFC is the designated beneficiary Salaries - clerical and sales State taxes Payroll taxes Repairs Utilities Interest Expense Loan to purchase state bonds Other business loans Advertising Rent Expense Meals Depreciation - S/L Depreciation - MACRS Accounting Bank Charges Licenses and Permits Miscellaneous Expense Office Supplies Business Insurance Promotional Expense Employee Benefit Programs Bad debt expense Legal and Professional fees 6,000 28,000 18,000 36,000 11,900 30,500 40,600 12,000 2,400 9,600 5,600 13,000 45,000 10,000 52,000 17,500 10,000 Prepare Form 1120 (all applicable schedules) for Jack's Flooring Company for the current tax year. On March 1, 2000, Ben Johnson and Mark Smith formed Jack's Flooring Company UFC) to sell flooring. The company also offers customers flooring installation services as well. The following information is relevant to the case: The business address is 1000 N. Hunters Rd, Cincinnati, Ohio 45280. Its telephone number is (937) 555-2234 and its e-mail address is customersales@jfc.com. The employer identification number is 35-8756123. The principal business activity code is Both Ben and Mark each own an equal share of the outstanding common stock; no other class of stock is authorized Ben (226-96-7454) is the President and Mark (155-11-2698) is Vice President. Each serve the company in a full time position and have a salary of $90,000. Ben's address is 7856 Town Rd, Cincinnati, Ohio 45280. Mark's address is 437 Hamilton Rd, Cincinnati, Ohio 45280. The corporation uses the accrual method of accounting and follows GAAP, the company reports on a calendar basis. Inventories are determined using FIFO and the lower of cost or market method. JFC has never changed its inventory method or written down any subnormal goods. The rules of Section 263A (UNICAP) do not apply to JFC. The specific charge-off method is used in handling bad debts, and JFC wrote off $25,000 in accounts receivable as uncollectible during the year. JFC did not receive any assets in Section 351 transfers during the year For book purposes, the straight-line method of depreciation is used, while for tax purposes, MACRS depreciation is used. (Note: depreciation should be entered on Line 17 of Form 4562 in ProConnect). During the year, the corporation was required to file Forms 1099 and did file them in a timely manner. During the year, JFC contributed $50,000 to American Red Cross. JFC purchased 1,500 shares of Home Depot Inc. stock on October 10, 2005 for $63,000 (including commission) On July 10, of the current year, JFC sold 500 shares of Home Depot Inc. for $100,000 (including commission) JFC received a 1099-B reporting the sale proceeds. Box 6b was checked on the Form 1099-B, During the year, JFC Corporation made timely quarterly income tax deposits to the IRS of $19,000, During the year, the corporation distributed a cash dividend of $60,000 A comparative balance sheet for JFC reveals the following information Assets $ 1/1 752,540 682,500 (180,000) 1,330,000 250,000 40,000 50,000 12/31 1,055,710 251,500 (172,500) 1,246,500 150,000 Tradie notes and accounts receivable Less: Allowance for doubtful accounts Inventories Stock investments State bonds Certificates of deposit Prepaid federal tax Buildings and other depreciable assets Accumulated depreciation Land Other assets Total assets 40,000 50,000 580,500 (166,150) 341,250 22,300 3,702,940 1,665 580,500 (196,650) 341,250 15,900 3,363,875 $ $ 1/1 S Liabilities and Equity Accounts payable Sales tax payable Salaries payable Payroll taxes payable Interest payable Mortgages (long-term) Capital stock Retained earnings (unappropriated) Total liabilities and equity 545,260 18,500 29,750 10,530 12,500 1,487,000 800,000 799,400 3,702,940 12/31 115,960 15,230 40,780 13,240 21,610 1,350,490 800,000 1,006,565 3,363,875 $ $ erected portions of JFC's profit and loss statement reflect the following 4,800,000 300,000 2,890,000 8,900 2,600 5,000 15,000 650,000 35,000 82,000 26,000 18,500 Account Gross Sales Sales returns and allowances Cost of goods sold Dividends received from stock investments in less-than-20% owned US Corporations Interest Income State bonds Certificates of Deposit Premiums on term life insurance policies on the lives of the officers; JFC is the designated beneficiary Salaries - clerical and sales State taxes Payroll taxes Repairs Utilities Interest Expense Loan to purchase state bonds Other business loans Advertising Rent Expense Meals Depreciation - S/L Depreciation - MACRS Accounting Bank Charges Licenses and Permits Miscellaneous Expense Office Supplies Business Insurance Promotional Expense Employee Benefit Programs Bad debt expense Legal and Professional fees 6,000 28,000 18,000 36,000 11,900 30,500 40,600 12,000 2,400 9,600 5,600 13,000 45,000 10,000 52,000 17,500 10,000 Prepare Form 1120 (all applicable schedules) for Jack's Flooring Company for the current tax year