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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

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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
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 fast-food
franchise business while Katherine had experience operating a small bakery.
After doing some market research, they established Bovine Inc. on
February 1 and made a timely and effective election to be taxed as an S
corporation. The company's address is 5432 Partridge Pl., Tulsa, Oklahoma
74105, and its employer identification number is 88-2214104.
The company started modestly. After refurbishing an old gas station that it
had purchased, the company opened for business on February 1 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
378 shares
378 shares
244 shares
On the formation date, shareholders made contributions as follows:
Katherine Riley contributed $28,500 in cash and 200 shares of MND stock, a
publicly held company, which had a fair market value of $19,000. Katherine
had purchased the MND stock on October 3,2004, for $10,000.
Mason McMullen contributed equipment worth $47,500 that had a
basis of $32,000.
Caroline Woodbrook contributed $30,000 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.
$12,000 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 by-laws.
Accounting fees were paid in May for setting up the books and the
accounting system, the actual work was done from February 20
March 31.
Miscellaneous expenses included a one-time $1,035 fee paid in
January to the State of Oklahoma to incorporate.
Bovine sold the MND for $30,000 on April 14. Shortly before the
sale, MND had declared and paid a dividend. Bovine received the
qualified dividend on April 1, which is listed in the trial balance.
MND is incorporated in Delaware.
Bovine has elected not to use the limited expensing provisions of
Code 179 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 $12,897.
Katherine Riley (Social Security No.667-21-4104) is president of
the corporation and spends 90% of her working time in the
business. She received a salary of $86,300. No other officers
received compensation. Her address is 5596 Surefire Place, Tulsa
Ok,74105.
The life insurance policy covers Katherine's life, and she has the
right to name the beneficiary.
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