Please complete the F1120 for the following scenario.

1) Andrew Lowe and Stephen Jackson are the two 50% shareholders of Jackson and Lowe, Inc., a furniture manufacturer (Business Code 337000). Jackson and Lowe is located at 1234 University Ave., Jacksonville, FL 32202. Its employer identification number is 76-3456789. The following information pertains to the corporate tax return: Name SSN Shares Title Compensation Stephen Jackson 386-05-9174 1,000 President $18,000 Andrew Lowe 297-63-2110 1,000 Vice Pres. $18,000 All salaries were paid during the current tax year.

2) The company was incorporated on June 1, four years ago. Each of the two officers hold one-half the stock, 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 devote 100% of their time to the business. Both officers are US citizens. Jackson and Lowe is not a member of a controlled group.

3) 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.

4) Addresses for the officers are: Andrew Lowe, 436 N.W. 24th Ave., Jacksonville, FL 32201; Stephen Jackson, 1250 N.E. 12th Ave., Jacksonville, FL 32203.

5) The corporation paid estimated taxes of $14,000 for the tax year.

6) The corporation paid dividends of $28,212 for the year.

7) The corporation uses MACRS depreciation for tax purposes. The current year tax depreciation is $52,910. There were no acquisitions, dispositions, or other changes to depreciable assets during the current year.

8) The corporation owns 2% of Plaza Corporation stock, 50 shares of Service Corporation stock, and some tax-exempt municipal bonds. The corporation acquired the Plaza stock on June 1st two years ago. It was sold on July 15th for $4,500 less than its $7,000 adjusted basis. Prior to the sale, Plaza paid a $1,000 dividend. The 50 shares of Service stock, which were purchased February 1st of the current year, were declared worthless during the year. The corporation recovered none of its $2,100 adjusted basis.

9) An analysis of the allowance for doubtful accounts reveals:

Balance as of 01/01/20XX $ 950 20XX

Transactions Provision for Bad Debts 1,275

Recovery of Bad Debts 425

Write-off of Bad Debts (650)

Balance as of 12/31/20XX $2,000

10) IF the corporation is due a refund it should be applied to the next years estimated tax payments.

Jackson and Lowe Income Statement 869,658 29,242 Less: Sales Returns and Allowances 840,416 540,204 300,212 Less: Cost of Goods Sold Gross Margin Operating Expenses 36,000 52,000 36,000 1,275 14,480 6,320 27,476 12,000 4,000 8,000 16,000 13,000 10,400 3,000 6,000 1,000 Officer's Salaries Other Salaries Rent Bad Debts Employment Taxes Charitable Contributions Travel Meals & Entertainment Office Expenses Advertising Transportation Expense General &Admin. Expenses Employee Benefits Miscellaneous Total Operating Expenses 246,951 Operating Income 53,261 Jackson and Lowe Income Statement 869,658 29,242 Less: Sales Returns and Allowances 840,416 540,204 300,212 Less: Cost of Goods Sold Gross Margin Operating Expenses 36,000 52,000 36,000 1,275 14,480 6,320 27,476 12,000 4,000 8,000 16,000 13,000 10,400 3,000 6,000 1,000 Officer's Salaries Other Salaries Rent Bad Debts Employment Taxes Charitable Contributions Travel Meals & Entertainment Office Expenses Advertising Transportation Expense General &Admin. Expenses Employee Benefits Miscellaneous Total Operating Expenses 246,951 Operating Income 53,261