Please complete the F1 120 for the following scenario. 1} 2} 3} 4} 5} *5} 3} Andrew Lowe and Stephen Jackson are the Mo 50% shareholders of Jackson and

IoWe, lnc., a furniture manufacturer (Business Code 337F000]. Jackson and Lowlife is located at 1234 UiVEI'Slly Aye, Jacksonville, FL 32202. Its employer

identication nUInber is T-3456T39. The following information pertains to the corporate tax return: Narne SEN Shares Title Compensation

Stephen Jackson3315-05-01 74 1,000President $13,000

Andrew Lowe201453-21 10 1,0001iu'ice PrEs. $18,000 All salaries were paid during the current tax year. The company was incorporated on June 1, four years ago. Each of the mo

ofcers hold one-half the stock.I which they acquired on that date for a total cash and property contribution of $200,000. No change in the stockholdings has

occurred since incorporation. Jackson and Lowe each deyotc 100% of their time

to the business. Both officers are US citizens. Jackson and Lowe is not a member of a controlled grouP. Three years ago, Jackson and Lowe acquired a local furniture manufacturer.

Goodwill of $12,000 was recorded for the purchase. There has been no

impairment in the goodwill since the acquisition. Addresses for the ofcers are: Andrew Lo'We, 436 N.W. 24m Aye, Jacksonville,

FL 32201; Stephen Jackson, 1250 RE. 12"1 Ave, Jacksonville, FL 32203. The corporation paid estimated taxes of $14,000 for the tax year.

The corporation paid dividends of $23,212 for the year. The corporation uses MACRS depreciation for tax purposes. rThe current year tax

depreciation is $51,910. There Were no acquisitions, dispositions, or other changes to depreciable assets during the current year. The corporation D'WTJS 2% of Plaza Corporation stock, 50 shares of Service

Corporation stock.' and some tax-exempt municipal bonds. The corporation

acquired the Plain stock on Inne 15t tWo years ago. It was sold on July 15"11 for

$4,500 less than its $71,000 adjusted basis. Prior to the sale, Flaza paid a $1,000

dividend. The 50 shares of Service stock, which were purchased February l"t ofthe current year, Were declared worthless during the year. The corporation

reeoVered none of its $2,100 adjusted basis. 9'} An analysis of the allowance for doubtful accounts retreals: Balance as oflflxx $ 950

20X): Transactions Provision for Bad Debts LETS

Eccoyery of Bad Debts 425

Write-off of Bad Debts {6501

Balance as of IZISUZUXX $2,000 10} IF the corporation is due a refund it should be applied to the next year's estimated

tax payments. The following are the corporation's current year income statement and balance sheet

for nancial remit-ting pnmoses. Jackson and Lowe

Income Statement Sales 666,666

Less: Sales Returns and Allowances 26,242

Net Sales 040,416

Less: Cost of Goods Sold 640,204

Gross Margin 300,212

Operating Expenses

Ofcer's Salaries 36,000

Other Salaries 52,000

Rent 36,000

Bari Debris 1,2?6

Em ployment Taxes 14,460

Repairs 6,320

Depreciation 2T,4?6

Charitable Contributions 12,000

Travel 4,000

Meals 6 Entertainment 6,000

Ofce Expenses 16,000

Advertising 1 3,000

Transportation Expense 10,400

General 3: Admin. Expenses 3,000

Employee Benets 6,000

Miscellaneous 1,000

Total Operating Expenses 246 651 Operating Income 63,261