Answered step by step
Verified Expert Solution
Question
1 Approved Answer
please show completed GTE form 1120-S Required information While James Craig and his former classmate Paul Dolittle both studied accounting at school, they ended up
please show completed GTE form 1120-S
Required information While James Craig and his former classmate Paul Dolittle both studied accounting at school, they ended up pursuing careers in professional cake decorating. Their company, Good to Eat (GTE), specializes in custom-sculpted cakes for weddings, birthdays, and other celebrations, James and Paul formed the business at the beginning of 2022, and each contributed $50,000 in exchange for a 50 percent ownership interest. GTE also borrowed $200,000 from a local bank. Both James and Paul had to personally guarantee the loan. Both owners provide significant services for the business. The following information pertains to GTE's 2022 activities: - GTE uses the cash method of accounting (for both book and tax purposes) and reports income on a calendar-year basis. - GTE recelved $450,000 of sales rovenue and reported $210,000 of cost of goods sold fit did not have any ending inventory). - GTE paid $30,000 compensation to James, $30,000 compensation to Paul, and $40,000 of compensation to other employees (assume these amounts include applicable payroll taxes, if any). - GTE paid $15,000 of rent for a buliding and equipment, $20,000 for advertising, $14,000 in interest expense, $4,000 for utilities, and $2,000 for supplies. - GTE contributed $5,000 to charity. - GTE recelved a $1,000 qualified dividend from a great stock investment (it owned 2 percent of the corporation distributing the dividend), and it recognized $1,500 in short-term capital gain when it sold some of the stock. - On December 1, 2022, GTE distributed $20,000 to James and $20,000 to Paul. - GTE has qualified property of $300,000 (unad)usted basis). a-1. Assume James and Paul formed GTE as an S corporation. Complete GTE's Form 1120-S, page 1; Form 1120-S, Schedule K. Note: Use 2022 tax rules regardless of year on tax form. Employer identification number: 58-1111111 Complete GTE's Form 1120-S, page 1; Form 1120-S, Schedule K Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started