prepare a book-tax reconciliation, 1120 1-6 4562 and schedule g

Round all numbers to a dollar figure. No decimals. 50 cents and above, round up. 49 cents and below, round down. Please do not even add zeros. Thanks. Return instructions: Please complete the 2020 Federal income tax return for Worlds of Wonder, Inc, based upon the facts presented below. If required information is missing, use reasonable assumptions to fill in the gaps. Worlds of Wonder, Inc. (WW) is organized as a corporation and is taxed as a C corporation with a calendar year end. WW owns and operates an amusement park in Tempe, Arizona. Tempe's weather allows WW to operate year-round. WW's address, employer identification number (EIN), and date of incorporation are as follows: Furm 1120 te Worlds of Wonder, Inc. 50 Boardwalk Tempe, Arizona 85202 EIN: 36-4385943 M1 sche 5 * Date Incorporated: May 11, 2004 WW has been at the same address since inception WW has only common shares issued (no preferred stock), WW is owned by 86 shareholders. The majority owner of WW is a large private equity firm based in San Jose, California called Area Adventures, LLC (AA). AA's address, employer identification, and other information are as follows: Area Adventures, LLC 675 Shady Wood Boulevard San Jose, California 95101 EIN:54-8293213 AA is taxed as a partnership for federal tax purposes. AA is organized in California. It owns 30% of the voting stock of WW directly. No other person or entity owns directly 20% or more, or owns, directly or indirectly, more than 50% of the voting stock of WW. WW uses the accrual method of accounting. WW is not a subsidiary nor is it in an affiliated group with any other entity. WW is not audited by a CPA firm. It does, however, use GAAP- based financial statements. WW has never had a restatement of its income statement WW reported the following information for 2020: WW did not pay dividends in excess of its current and accumulated earnings and profits. None of the stock of WW is owned by non-U.S. persons WW has never issued publicly offered debt instruments. WW is not required to file a Form UTP, Uncertain Tax Position Statement WW made payments that required it to file federal Form(s) 1099. These Forms 1099 were filed timely by WW. WW"'s average annual gross receipts for the prior three years are under $26,000,000 None of the shareholders of WW changed during the year. WW has never disposed of more than 65% (by value) of its assets in a taxable, no non- taxable, or tax deferred transaction. WW did not receive any assets in a Section 351 transfer during the year. a . . . . Additional information: On August 1, 2020 WW was notified by its legal counsel that WW was being sued by a former employee regarding her termination of employment from WW. On December 21, 2020, a legal settlement was reached with this terminated employee. As part of the settlement, WW agreed to pay the employee a settlement amount of $190.000 on January 10, 2021. WW accrued this expense on its 2020 financial statements WW maintains a portfolio of tax-exempt securitie (none of which is a private activity bond) and publicly traded stocks as a measure to provide immediate liquidity if needed (none of these investments is debt financed). All of these securities originate from less than 20% owned domestic corporations WW owns 12% of Fair Fun, Inc. FE remitted dividends to WW of $14.300 during the year From inception until this year the Super Coaster had been WW's main attraction, but as it aged, it has lost some appeal. To attract new customers. WW purchased a new attraction known as the Ceiling Screamer. The Ceiling Screamer was installed and rendered operational on March 1, 2020. The Ceiling Screamer cost $6,000,000 to acquire, install, and make ready for service WW's regular tax depreciation for the year is correctly calculated as $1.112.499 before considering the 2020 addition of the Ceiling Screamer WW wants to claim the maximum allowable deduction for the Ceiling Screamer in 2020. Because of Ceiling Screamer's modular design, it is considered personal property as opposed to real property WW officer information for the year is as follows (compensation amounts included in total wages on the income statement for all employees): Name Social security Percent of time Percent of stock mount of number devoted to owned compensation business Bekah Williams 435-54-2342 100% .05% $235.000 Anna Allison 243-98-3242 100% 03% $195.000 Liz Devon 194-23-7435 100% 0% $165,000 Nelly Phelps 623-53-3920 100% 0% $150,000 Near the end of the year, WW switched its property and casualty insurance company. As a result, the plan year for its insurance contract was altered. On December 31, 2020 WW prepaid insurance premiums of $25,000 representing coverage through February 15, 2021 as a condition of being accepted by the new company. WW did not expense any of the prepayment for financial accounting purposes WW rents from vendors several pieces of equipment to use in its business. As of December 31, 2019 and December 31, 2020, respectively, WW had prepaid vendors for equipment rental of $30,000 for January 2020 and $35,000 for January 2021. On December 26, 2020 WW prepaid a contractor $17.500 to repair several pieces of maintenance shop equipment in January of 2021. WW fully expects that the contractor will have completed the project by January 31, 2021 All the accrued wages and bonus amounts on the financial statements as of December 31, 2019 were paid on February 28, 2020, As of December 31, 2019 and 2020), respectively, WW hand vacation accruals on its books of $29,000 and $15,000. As of March 15, 2020 and 2021, respectively. WW had paid $5,000 and $8,000 of those accrued amounts. On December 2, 2020, the millionth customer entered the park. To recognize the accomplishment and to promote the amusement park through print and radio media advertisements, WW held a give-away contest wherein the lucky customer deemed to be the millionth customer would be given $100,000. The check was presented to the lucky winner on January 15, 2021 The land on which WW resides is owned by the county. WW has a very favorable lease with the county that allows WW the ability to sublease any portion of the ground to another tenant. The board of directors of WW made the decision in the fall of 2020 to seek out a tenant for unimproved land that would not be utilized in any potential expansion plans. WW identified the potential renter and entered into a contract with the renter on December 1, 2020. The rent period is to begin on January 1, 2018; however, as part of the contract, by December 31,2020. WW received a check of $50,000 on December 27, 20207 from the renter. This rental payment is not refundable to the renter under any circumstances. WW maintains an inventory of several items that it uses in its amusement park. Inventory is valued at cost. WW has never has never changed it inventory method. WW uses specific identification for its inventory. WW has never written down any subnormal goods. The rules of Section 263A (Unicap) apply to WW. The Unicap calculated costs related to ending inventory at December 31, 2019 and 2020, respectively, were $15,000 and $19,000. The current year 263A costs were $22,610 and $18,610 including COGS during 2020. WW does not include any of its salary and wages expenses as labor costs for COGS. On December 1, 2020, WW paid a $400,000 dividend to all common stockholders. During the year, WW made Federal estimated income tax payments of $72,500 each on April 15, June 15, September 15 and December 15 of 2017 ($290,000 in total). If WW has overpaid its current year estimated taxes, it would like to apply the excess to its estimated tax payments for next year. WW is NOT a "large corporation." WW's 2019 tax liability was $200,000. WW made Arizona state estimated income tax payments of $15,000 each on April 15, June 15, September 15 and December 15 of 2017 (560,000 in total). Financial Statements (kept on a GAAP basis) Worlds of Wonder, Inc. Balance Sheet 12/11/20 Assets 12/31210 Cash Accounts Receivable Less: Allowance for Bad Debts Inventory Tax-exempt Securities Publicly Traded Stocks Fixed Assets Less: Acc. Depreciation Prepaid Insurance Prepaid Rent Prepaid Installation Contract Other Assets $ 165,000 128.000 (3.000) 122.000 150.000 200.000 24.000.000 (13,542,000) 0 30,000 0 150.000 $ 129,000 75.000 (49.000) 390.000 150,000 200.000 28,000,000 (12892,000) 25,000 35,000 17,500 250.000 $16.330,500 Total Assets: $11,660,000 Liabilities and Shareholders' Equity: Accounts Payable 48,000 Accrued Wages 123,000 Accrued Bonuses 68,500 Accrued Vacation 29,000 Legal Settlement Accrual 0 Prize Accrual 0 Unearned Rental Income 0 Note Payable-First Bank of CA (Credit Line) 1,540.000 Note Payable-Equipment Leasing, Inc. 7,112,000 Capital Stock 100,000 Additional paid-in Capital 2,000,000 Retained Earnings-Unappropriated 639,500 Total Liabilities and Shareholders' Equity: $11,660,000 62,000 118,000 39,000 35,000 190.000 100,000 50,000 1,084,000 11,728,000 100,000 2,000,000 824 500 $16,330,500 Income Statement for the period ending December 31, 2020 Item Amount Income Gross Sales Less Returns Net Sales $26,523,275 (113,500 26,409,775 Cost of Goods Sold (2,052,500) Dividend Income Interest Income Municipal Bond Interest Income 14,300 2,650 2.300 24,376,525 Total Income: Expenses: Employee Salaries Repairs and Maintenance Bad Debts Rent Payroll Taxes Licensing Fees Property Taxes Interest Expense Depreciation Office Supplies Employee Training Safety Expenses Political Contribution CA Safety Commission Fine Advertising Admission Supplies Meals and Entertainment Travel Insurance Legal Settlement Prize Contest Expense Fuel Utilities Telephone 13,905,600 492,350 58,000 1,543,000 (1,112,400 10,750 257 15040150 277,000 781,000 1,350,000 33,950 53,750 31,000 2,500 5,000 290,500 143.250 8,500 13,550 215,000 190,000 100,000 158,675 2,530,500 135.250 $23.441 525 Total Expenses before taxes: AZ state income tax expense Federal tax expense 60,000 290,000 Total income taxes Net Income: $350,000 $ 585,000 Round all numbers to a dollar figure. No decimals. 50 cents and above, round up. 49 cents and below, round down. Please do not even add zeros. Thanks. Return instructions: Please complete the 2020 Federal income tax return for Worlds of Wonder, Inc, based upon the facts presented below. If required information is missing, use reasonable assumptions to fill in the gaps. Worlds of Wonder, Inc. (WW) is organized as a corporation and is taxed as a C corporation with a calendar year end. WW owns and operates an amusement park in Tempe, Arizona. Tempe's weather allows WW to operate year-round. WW's address, employer identification number (EIN), and date of incorporation are as follows: Furm 1120 te Worlds of Wonder, Inc. 50 Boardwalk Tempe, Arizona 85202 EIN: 36-4385943 M1 sche 5 * Date Incorporated: May 11, 2004 WW has been at the same address since inception WW has only common shares issued (no preferred stock), WW is owned by 86 shareholders. The majority owner of WW is a large private equity firm based in San Jose, California called Area Adventures, LLC (AA). AA's address, employer identification, and other information are as follows: Area Adventures, LLC 675 Shady Wood Boulevard San Jose, California 95101 EIN:54-8293213 AA is taxed as a partnership for federal tax purposes. AA is organized in California. It owns 30% of the voting stock of WW directly. No other person or entity owns directly 20% or more, or owns, directly or indirectly, more than 50% of the voting stock of WW. WW uses the accrual method of accounting. WW is not a subsidiary nor is it in an affiliated group with any other entity. WW is not audited by a CPA firm. It does, however, use GAAP- based financial statements. WW has never had a restatement of its income statement WW reported the following information for 2020: WW did not pay dividends in excess of its current and accumulated earnings and profits. None of the stock of WW is owned by non-U.S. persons WW has never issued publicly offered debt instruments. WW is not required to file a Form UTP, Uncertain Tax Position Statement WW made payments that required it to file federal Form(s) 1099. These Forms 1099 were filed timely by WW. WW"'s average annual gross receipts for the prior three years are under $26,000,000 None of the shareholders of WW changed during the year. WW has never disposed of more than 65% (by value) of its assets in a taxable, no non- taxable, or tax deferred transaction. WW did not receive any assets in a Section 351 transfer during the year. a . . . . Additional information: On August 1, 2020 WW was notified by its legal counsel that WW was being sued by a former employee regarding her termination of employment from WW. On December 21, 2020, a legal settlement was reached with this terminated employee. As part of the settlement, WW agreed to pay the employee a settlement amount of $190.000 on January 10, 2021. WW accrued this expense on its 2020 financial statements WW maintains a portfolio of tax-exempt securitie (none of which is a private activity bond) and publicly traded stocks as a measure to provide immediate liquidity if needed (none of these investments is debt financed). All of these securities originate from less than 20% owned domestic corporations WW owns 12% of Fair Fun, Inc. FE remitted dividends to WW of $14.300 during the year From inception until this year the Super Coaster had been WW's main attraction, but as it aged, it has lost some appeal. To attract new customers. WW purchased a new attraction known as the Ceiling Screamer. The Ceiling Screamer was installed and rendered operational on March 1, 2020. The Ceiling Screamer cost $6,000,000 to acquire, install, and make ready for service WW's regular tax depreciation for the year is correctly calculated as $1.112.499 before considering the 2020 addition of the Ceiling Screamer WW wants to claim the maximum allowable deduction for the Ceiling Screamer in 2020. Because of Ceiling Screamer's modular design, it is considered personal property as opposed to real property WW officer information for the year is as follows (compensation amounts included in total wages on the income statement for all employees): Name Social security Percent of time Percent of stock mount of number devoted to owned compensation business Bekah Williams 435-54-2342 100% .05% $235.000 Anna Allison 243-98-3242 100% 03% $195.000 Liz Devon 194-23-7435 100% 0% $165,000 Nelly Phelps 623-53-3920 100% 0% $150,000 Near the end of the year, WW switched its property and casualty insurance company. As a result, the plan year for its insurance contract was altered. On December 31, 2020 WW prepaid insurance premiums of $25,000 representing coverage through February 15, 2021 as a condition of being accepted by the new company. WW did not expense any of the prepayment for financial accounting purposes WW rents from vendors several pieces of equipment to use in its business. As of December 31, 2019 and December 31, 2020, respectively, WW had prepaid vendors for equipment rental of $30,000 for January 2020 and $35,000 for January 2021. On December 26, 2020 WW prepaid a contractor $17.500 to repair several pieces of maintenance shop equipment in January of 2021. WW fully expects that the contractor will have completed the project by January 31, 2021 All the accrued wages and bonus amounts on the financial statements as of December 31, 2019 were paid on February 28, 2020, As of December 31, 2019 and 2020), respectively, WW hand vacation accruals on its books of $29,000 and $15,000. As of March 15, 2020 and 2021, respectively. WW had paid $5,000 and $8,000 of those accrued amounts. On December 2, 2020, the millionth customer entered the park. To recognize the accomplishment and to promote the amusement park through print and radio media advertisements, WW held a give-away contest wherein the lucky customer deemed to be the millionth customer would be given $100,000. The check was presented to the lucky winner on January 15, 2021 The land on which WW resides is owned by the county. WW has a very favorable lease with the county that allows WW the ability to sublease any portion of the ground to another tenant. The board of directors of WW made the decision in the fall of 2020 to seek out a tenant for unimproved land that would not be utilized in any potential expansion plans. WW identified the potential renter and entered into a contract with the renter on December 1, 2020. The rent period is to begin on January 1, 2018; however, as part of the contract, by December 31,2020. WW received a check of $50,000 on December 27, 20207 from the renter. This rental payment is not refundable to the renter under any circumstances. WW maintains an inventory of several items that it uses in its amusement park. Inventory is valued at cost. WW has never has never changed it inventory method. WW uses specific identification for its inventory. WW has never written down any subnormal goods. The rules of Section 263A (Unicap) apply to WW. The Unicap calculated costs related to ending inventory at December 31, 2019 and 2020, respectively, were $15,000 and $19,000. The current year 263A costs were $22,610 and $18,610 including COGS during 2020. WW does not include any of its salary and wages expenses as labor costs for COGS. On December 1, 2020, WW paid a $400,000 dividend to all common stockholders. During the year, WW made Federal estimated income tax payments of $72,500 each on April 15, June 15, September 15 and December 15 of 2017 ($290,000 in total). If WW has overpaid its current year estimated taxes, it would like to apply the excess to its estimated tax payments for next year. WW is NOT a "large corporation." WW's 2019 tax liability was $200,000. WW made Arizona state estimated income tax payments of $15,000 each on April 15, June 15, September 15 and December 15 of 2017 (560,000 in total). Financial Statements (kept on a GAAP basis) Worlds of Wonder, Inc. Balance Sheet 12/11/20 Assets 12/31210 Cash Accounts Receivable Less: Allowance for Bad Debts Inventory Tax-exempt Securities Publicly Traded Stocks Fixed Assets Less: Acc. Depreciation Prepaid Insurance Prepaid Rent Prepaid Installation Contract Other Assets $ 165,000 128.000 (3.000) 122.000 150.000 200.000 24.000.000 (13,542,000) 0 30,000 0 150.000 $ 129,000 75.000 (49.000) 390.000 150,000 200.000 28,000,000 (12892,000) 25,000 35,000 17,500 250.000 $16.330,500 Total Assets: $11,660,000 Liabilities and Shareholders' Equity: Accounts Payable 48,000 Accrued Wages 123,000 Accrued Bonuses 68,500 Accrued Vacation 29,000 Legal Settlement Accrual 0 Prize Accrual 0 Unearned Rental Income 0 Note Payable-First Bank of CA (Credit Line) 1,540.000 Note Payable-Equipment Leasing, Inc. 7,112,000 Capital Stock 100,000 Additional paid-in Capital 2,000,000 Retained Earnings-Unappropriated 639,500 Total Liabilities and Shareholders' Equity: $11,660,000 62,000 118,000 39,000 35,000 190.000 100,000 50,000 1,084,000 11,728,000 100,000 2,000,000 824 500 $16,330,500 Income Statement for the period ending December 31, 2020 Item Amount Income Gross Sales Less Returns Net Sales $26,523,275 (113,500 26,409,775 Cost of Goods Sold (2,052,500) Dividend Income Interest Income Municipal Bond Interest Income 14,300 2,650 2.300 24,376,525 Total Income: Expenses: Employee Salaries Repairs and Maintenance Bad Debts Rent Payroll Taxes Licensing Fees Property Taxes Interest Expense Depreciation Office Supplies Employee Training Safety Expenses Political Contribution CA Safety Commission Fine Advertising Admission Supplies Meals and Entertainment Travel Insurance Legal Settlement Prize Contest Expense Fuel Utilities Telephone 13,905,600 492,350 58,000 1,543,000 (1,112,400 10,750 257 15040150 277,000 781,000 1,350,000 33,950 53,750 31,000 2,500 5,000 290,500 143.250 8,500 13,550 215,000 190,000 100,000 158,675 2,530,500 135.250 $23.441 525 Total Expenses before taxes: AZ state income tax expense Federal tax expense 60,000 290,000 Total income taxes Net Income: $350,000 $ 585,000