Prepare Pet Kingdoms corporate tax return for tax year 2020 using Form 1120 and any other appropriate forms and schedules. If a form or schedule says to attach a statement, then prepare a statement in a word document. Details for the statements: Each statement needs numbered (i.e. Statement 1), the form, schedule, line number, line description that the amount goes to and details for the amount (if it is a sum of an amount then show all details of what goes into that amount). Complete 2020 Form 1120 and any other appropriate forms and schedules Go through the Income Statement for Pet Kingdom and identify the items that are treated differently on the tax return. They might be tax exempt, nondeductible or only partially deductible. Work back and forth from the income statement to the tax return. Find a place for each income statement item. Be sure to complete Schedule A Cost of Goods sold. Pet Kingdom, Inc. is a retailer. Polish your 1120 1120 p.1) Use whole dollars no pennies; dont fill up every empty line with zeroes. Fill in name & address box and boxes A, B, C & D. (Box A may or may not apply. Box D is an endofyear number.) Complete the rest of p.1. (If there is an overpayment, they prefer a refund.) 1120 p.2) Complete Schedule C 1120 p.3, 4, 5) Schedule J Part 1 will have entries on lines 2,4,7,11 and Part III used also. Fill out Schedule K. (Dont lose the easy points!) 1120 p.6) Complete Schedules L, M1 and M2. Prepare statements as necessary for these schedules. Schedule M1: This is where you identify each item that is different from what it was on the books. Watch it; you reconcile to p. 1, line 28. 1120 Schedule G and M3 Review these schedules and determine on your own if you need to include them. If so, then make sure they are fully completed.
ProConnect Tax On November 1, 2009, Janet Morton and Kim Wong formed Pet Kingdom, Inc., to sell pets and pet supplies. Pertinent information regarding Pet Kingdom is summarized as follows: Pet Kingdom's business address is 1010 Northwest Parkway, Dallas, TX 75225; its telephone number is (214) 555-2211; and its e-mail address is petkingdom@pki.com. The employer identification number is 11-1111112, and the principal business activity code is 453910. Janet and Kim each own 50% of the common stock; Janet is president and Kim is vice president of the company. No other class of stock is authorized. Both Janet and Kim are full-time employees of Pet Kingdom. Janet's Social Security number is 123-45-6788, and Kim's Social Security number is 123-45-6787. Pet Kingdom is an accrual method, calendar year taxpayer. Inventories are determined using FIFO and the lower of cost or market method. Pet Kingdom uses the straight-line method of depreciation for book purposes and accelerated depreciation (MACRS) for tax purposes. During 2020, the corporation distributed cash dividends of $250,000. Pet Kingdom's financial statements for 2020 are shown below. Income Statement Income $ 5,750,000 (200,000) $ 5,550,000 (2,300,000) $3,250,000 Gross sales Sales returns and allowances Net sales Cost of goods sold Gross profit Dividends received from stock investments in less-than-20%- owned U.S. corporations Interest income: : State bonds Certificates of deposit Total income 43,750 $ 15,000 20,000 35,000 $ 3,328,750 $ 262,500 262,500 $525,000 725,000 238,000 140,000 $ 9,000 207,000 Expenses Salaries-officers: Janet Morton Kim Wong Salaries-clerical and sales Taxes (state, local, and payroll) Repairs and maintenance Interest expense: Loan to purchase state bonds Other business loans Advertising Rental expense Depreciation* Charitable contributions (cash) Employee benefit programs Premiums on term life insurance policies on lives of Janet Morton and Kim Wong; Pet Kingdom is the designated beneficiary Total expenses Net income before taxes Federal income tax Net income per books 216,000 58,000 109,000 106,000 38,000 60,000 40,000 (2,255,000) $ 1,073,750 (221,734) $ 852,016 *Depreciation for tax purposes is $136,000. You are not provided enough detailed data to complete a Form 4562 (depreciation). If you solve this problem using Intuit ProConnect, enter the amount of depreciation on line 20 of Form 1120. Balance Sheet Assets Cash Trade notes and accounts receivable Inventories State bonds Federal income tax refund Certificates of deposit Stock investments Building and other depreciable assets Accumulated depreciation Land Other assets Total assets January 1, 2020 $ 380,000 308,400 900,000 160,000 -0- 140,000 300,000 240,000 (88,800) 20,000 3,600 $2,363,200 December 31, 2020 $ 337,300 480,280 1,012,000 160,000 1,320 140,000 300,000 240,000 (128,800) 20,000 2,000 $2,564,100 Liabilities and Equity Accounts payable Other current liabilities Mortgages Capital stock Retained earnings Total liabilities and equity January 1, 2020 $ 300,000 80,300 210,000 500,000 1,272,900 $2,363,200 December 31, 2020 $ 233,880 40,000 200,000 500,000 1,590,220 $2,564,100 ProConnect Tax On November 1, 2009, Janet Morton and Kim Wong formed Pet Kingdom, Inc., to sell pets and pet supplies. Pertinent information regarding Pet Kingdom is summarized as follows: Pet Kingdom's business address is 1010 Northwest Parkway, Dallas, TX 75225; its telephone number is (214) 555-2211; and its e-mail address is petkingdom@pki.com. The employer identification number is 11-1111112, and the principal business activity code is 453910. Janet and Kim each own 50% of the common stock; Janet is president and Kim is vice president of the company. No other class of stock is authorized. Both Janet and Kim are full-time employees of Pet Kingdom. Janet's Social Security number is 123-45-6788, and Kim's Social Security number is 123-45-6787. Pet Kingdom is an accrual method, calendar year taxpayer. Inventories are determined using FIFO and the lower of cost or market method. Pet Kingdom uses the straight-line method of depreciation for book purposes and accelerated depreciation (MACRS) for tax purposes. During 2020, the corporation distributed cash dividends of $250,000. Pet Kingdom's financial statements for 2020 are shown below. Income Statement Income $ 5,750,000 (200,000) $ 5,550,000 (2,300,000) $3,250,000 Gross sales Sales returns and allowances Net sales Cost of goods sold Gross profit Dividends received from stock investments in less-than-20%- owned U.S. corporations Interest income: : State bonds Certificates of deposit Total income 43,750 $ 15,000 20,000 35,000 $ 3,328,750 $ 262,500 262,500 $525,000 725,000 238,000 140,000 $ 9,000 207,000 Expenses Salaries-officers: Janet Morton Kim Wong Salaries-clerical and sales Taxes (state, local, and payroll) Repairs and maintenance Interest expense: Loan to purchase state bonds Other business loans Advertising Rental expense Depreciation* Charitable contributions (cash) Employee benefit programs Premiums on term life insurance policies on lives of Janet Morton and Kim Wong; Pet Kingdom is the designated beneficiary Total expenses Net income before taxes Federal income tax Net income per books 216,000 58,000 109,000 106,000 38,000 60,000 40,000 (2,255,000) $ 1,073,750 (221,734) $ 852,016 *Depreciation for tax purposes is $136,000. You are not provided enough detailed data to complete a Form 4562 (depreciation). If you solve this problem using Intuit ProConnect, enter the amount of depreciation on line 20 of Form 1120. Balance Sheet Assets Cash Trade notes and accounts receivable Inventories State bonds Federal income tax refund Certificates of deposit Stock investments Building and other depreciable assets Accumulated depreciation Land Other assets Total assets January 1, 2020 $ 380,000 308,400 900,000 160,000 -0- 140,000 300,000 240,000 (88,800) 20,000 3,600 $2,363,200 December 31, 2020 $ 337,300 480,280 1,012,000 160,000 1,320 140,000 300,000 240,000 (128,800) 20,000 2,000 $2,564,100 Liabilities and Equity Accounts payable Other current liabilities Mortgages Capital stock Retained earnings Total liabilities and equity January 1, 2020 $ 300,000 80,300 210,000 500,000 1,272,900 $2,363,200 December 31, 2020 $ 233,880 40,000 200,000 500,000 1,590,220 $2,564,100
