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please create 4 fincaial statement using this information and the trial balance attached In the current tax year, Katherine Riley and Mason McMullen decided they
please create fincaial statement using this information and the trial balance attached
In the current tax year, Katherine Riley and Mason McMullen decided they
would like to start their own gourmet hamburger business. Katherine and
Mason believed that the public would love the recipes used by Katherine's
mom, Caroline Woodbrook. They also thought they had the necessary
experience to enter this business since Mason currently owned a fastfood
franchise business while Katherine had experience operating a small bakery.
After doing some market research, they established Bovine Inc. on
February and made a timely and effective election to be taxed as an S
corporation. The company's address is Partridge Pl Tulsa, Oklahoma
and its employer identification number is
The company started modestly. After refurbishing an old gas station that it
had purchased, the company opened for business on February of the
current tax year. The business was a booming success. By the end of the
current tax year, the company had established two other locations.
Bovine has three shareholders who own stock as follows:
Katherine Riley
Mason McMullen
Caroline Woodbrook
shares
shares
shares
On the formation date, shareholders made contributions as follows:
Katherine Riley contributed $ in cash and shares of MND stock, a
publicly held company, which had a fair market value of $ Katherine
had purchased the MND stock on October for $
Mason McMullen contributed equipment worth $ that had a
basis of $
Caroline Woodbrook contributed $ in cash.
The company is on an accrual basis and has chosen to use the calendar year
for tax purposes. Its adjusted trial balance for financial accounting purposes
can be accessed at this link.
The company has provided additional information below.
$ of the notes payable are due in the next year.
The charitable contributions were made in cash to a qualified public
charitable organization.
The legal costs were for work done by Bovine attorney in January
for drafting the articles of incorporation and bylaws.
Accounting fees were paid in May for setting up the books and the
accounting system, the actual work was done from February
March
Miscellaneous expenses included a onetime $ fee paid in
January to the State of Oklahoma to incorporate.
Bovine sold the MND for $ on April Shortly before the
sale, MND had declared and paid a dividend. Bovine received the
qualified dividend on April which is listed in the trial balance.
MND is incorporated in Delaware.
Bovine has elected not to use the limited expensing provisions of
Code or any bonus depreciation, but has otherwise claimed
the maximum depreciation for all assets. It made any other
elections required to minimize the corporation's tax liability.
Assume current year depreciation for tax purposes is $
Katherine Riley Social Security No is president of
the corporation and spends of her working time in the
business. She received a salary of $ No other officers
received compensation. Her address is Surefire Place, Tulsa
Ok
The life insurance policy covers Katherine's life, and she has the
right to name the beneficiary.
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