Tax Return Problem - Fall 2020 (1) Saved to my Mac yout References Mailings Review View Tell me 21 Albcode Aber A A ADA AaBBCCD ABCD AaBb Hea Tax return information You own a t-shirt screen printing company called Back the Pack. Back the Pack operates as a regular Corporation under Subchapter of the Internal Revenue Code. Back the Pack incorporated on April 1, 2014 and business began on June 1, 2014. The company owns the building that the store is located in and all of the equipment that the business uses. The tax yeur for the Corporation is the calendar year and it is on the accrual method. The tax identification number for Back the Pack is 12-345678. Please complete the 2019 Form 4562 - Depreciation and Amortization. You do not need to complete Parts I, II, V and VI of the form because you should assume you are not electing the Section 179 deduction, you have elected out of bonus depreciation, you have no listed property for the 2019 tax year, and no intangible assets to amortize. You will compute MACRS depreciation in Parts III and IV. You will also need to complete Page 1 of the 2019 Form 1120 - U.S. Corporation Income Tax Return. You will only need to complete through line 30. These forms are found on the IRS website (www.irs.gov). Also, complete the Modified Schedule M-1 Reconciliation of Income (Loss) per Books with Income per Return uploaded on Moodle instead of the Schedule M-1 on page 5 of the Form 1120. This is the itemized book- tax differences ("BTD"). Put each BTD separately in the correct section Note that the depreciation amounts computed on Form 4562 flow to Form 1120 page 1. The Form 1120 page 1 is the tax income statement that includes all tax amounts for income and deductions. The Modified Schedule M-1 starts with net income per books and adjusts the book revenues and expenses to tax amounts using book-tax differences. Line 28 of the Form 1120 should tle to line 8 on the Modified Schedule M-1. Do not worry about including any non- mumerical information that is not provided with the assignment. Tax Return Problem - Fall 2020 (1) Saved to my Moc View Tell me References Mailings Review A Abbcode Aabende AaB CCD ABCD AaB Heading 1 Heading 2 D A Normal No Spacing Title The company owns the following assets: Land purchased on 5/1/2014 for $200,000. The land was placed in service on 6/1/2014. Building purchased on 5/1/2014 for $655,000. The building was placed in service on 6/1/2014. Screen printing machinery (Tyr) purchased and placed in service on 6/1/2014 for $280,000. Office furniture and fixtures (Tyr) purchased and placed in service on 1/1/2015 for $55,000 Additional screen printing machinery (Tyr) purchased and placed in service on 2/1/2019 for $235,000 I Computer equipment (5yr) purchased and placed in service on 3/1/2019 for $35,000 Warehouse (39yr) purchased and placed in service on 9/1/2019 for $560,000 Back the Pack uses straight line depreciation for book purposes. See the book income statement in the Excel workbook for book depreciation expense for 2019. . In additional information for 2019 follows: On November 1, 2019, the Company paid $18,000 premium for a casualty insurance policy for the period 1/1/2020 through 12/31/2020. Specific account write-offs charged to the Allowance for Doubtful Accounts equaled $35,000 Bonuses were paid on March 28, 2020 Focus Tax return guidance --- Saved to my Mac Tell me ences Mailings Review View Tax return preparation guidance 1) The GAAP income statement is provided for you in the Excel spreadsheet. 2) Calculate tax depreciation amounts using the information from the problem and complete form 4562 with your depreciation numbers. For Part III, note that line 17 is the sum of MACRS depreciation for assets put into service before the 2019 tax return year. You should fill out the lines under line 19 for assets placed into service during the tax return year. 3) Calculate book-tax differences for each income and expense item and formulate a "tax" income statement. The book tax differences will reconcile the book income before income tax down to the taxable income (like what we did in Chapter 6) and this reconciliation and the book-tax differences will go on the M-1. Do not worry about calculating tax expense per the books and disregard that line item on the M-1. 4) Put your completed tax income statement on page 1 of the 1120. Note that taxable income per the M-1 should tie to line 28 of the 1120. AutoSave urr Home Insert Draw Page Layout Formulas Data Review View Calibri (Body) 11 ' == Paste B IU a A v A11 Ax & fc Advertising Costs B D E 3 December 31, 2019 Debit Credit 1,675,000 435,000 3,500 475,000 120,000 13,500 5,000 850 22,000 82,500 1,153,850 1,678,500 5 6 Sales 7 Cost of Goods Sold 8 Municipal Bond Interest Income 9 Salaries and Wages (all paid by 12/31/2019) 10 Bonuses 11 Advertising Costs 12 Meals Expense 13 Penalty Expense 14 Bad Debt Expense 15 Depreciation Expense 16 Casualty Insurance Expense 17 18 Totals 19 20 Book Income Before Taxes 21 22 23 24 25 26 27 28 29 30 31 32 524,650 34 35 30 Tax Return Problem - Fall 2020 (1) Saved to my Mac yout References Mailings Review View Tell me 21 Albcode Aber A A ADA AaBBCCD ABCD AaBb Hea Tax return information You own a t-shirt screen printing company called Back the Pack. Back the Pack operates as a regular Corporation under Subchapter of the Internal Revenue Code. Back the Pack incorporated on April 1, 2014 and business began on June 1, 2014. The company owns the building that the store is located in and all of the equipment that the business uses. The tax yeur for the Corporation is the calendar year and it is on the accrual method. The tax identification number for Back the Pack is 12-345678. Please complete the 2019 Form 4562 - Depreciation and Amortization. You do not need to complete Parts I, II, V and VI of the form because you should assume you are not electing the Section 179 deduction, you have elected out of bonus depreciation, you have no listed property for the 2019 tax year, and no intangible assets to amortize. You will compute MACRS depreciation in Parts III and IV. You will also need to complete Page 1 of the 2019 Form 1120 - U.S. Corporation Income Tax Return. You will only need to complete through line 30. These forms are found on the IRS website (www.irs.gov). Also, complete the Modified Schedule M-1 Reconciliation of Income (Loss) per Books with Income per Return uploaded on Moodle instead of the Schedule M-1 on page 5 of the Form 1120. This is the itemized book- tax differences ("BTD"). Put each BTD separately in the correct section Note that the depreciation amounts computed on Form 4562 flow to Form 1120 page 1. The Form 1120 page 1 is the tax income statement that includes all tax amounts for income and deductions. The Modified Schedule M-1 starts with net income per books and adjusts the book revenues and expenses to tax amounts using book-tax differences. Line 28 of the Form 1120 should tle to line 8 on the Modified Schedule M-1. Do not worry about including any non- mumerical information that is not provided with the assignment. Tax Return Problem - Fall 2020 (1) Saved to my Moc View Tell me References Mailings Review A Abbcode Aabende AaB CCD ABCD AaB Heading 1 Heading 2 D A Normal No Spacing Title The company owns the following assets: Land purchased on 5/1/2014 for $200,000. The land was placed in service on 6/1/2014. Building purchased on 5/1/2014 for $655,000. The building was placed in service on 6/1/2014. Screen printing machinery (Tyr) purchased and placed in service on 6/1/2014 for $280,000. Office furniture and fixtures (Tyr) purchased and placed in service on 1/1/2015 for $55,000 Additional screen printing machinery (Tyr) purchased and placed in service on 2/1/2019 for $235,000 I Computer equipment (5yr) purchased and placed in service on 3/1/2019 for $35,000 Warehouse (39yr) purchased and placed in service on 9/1/2019 for $560,000 Back the Pack uses straight line depreciation for book purposes. See the book income statement in the Excel workbook for book depreciation expense for 2019. . In additional information for 2019 follows: On November 1, 2019, the Company paid $18,000 premium for a casualty insurance policy for the period 1/1/2020 through 12/31/2020. Specific account write-offs charged to the Allowance for Doubtful Accounts equaled $35,000 Bonuses were paid on March 28, 2020 Focus Tax return guidance --- Saved to my Mac Tell me ences Mailings Review View Tax return preparation guidance 1) The GAAP income statement is provided for you in the Excel spreadsheet. 2) Calculate tax depreciation amounts using the information from the problem and complete form 4562 with your depreciation numbers. For Part III, note that line 17 is the sum of MACRS depreciation for assets put into service before the 2019 tax return year. You should fill out the lines under line 19 for assets placed into service during the tax return year. 3) Calculate book-tax differences for each income and expense item and formulate a "tax" income statement. The book tax differences will reconcile the book income before income tax down to the taxable income (like what we did in Chapter 6) and this reconciliation and the book-tax differences will go on the M-1. Do not worry about calculating tax expense per the books and disregard that line item on the M-1. 4) Put your completed tax income statement on page 1 of the 1120. Note that taxable income per the M-1 should tie to line 28 of the 1120. AutoSave urr Home Insert Draw Page Layout Formulas Data Review View Calibri (Body) 11 ' == Paste B IU a A v A11 Ax & fc Advertising Costs B D E 3 December 31, 2019 Debit Credit 1,675,000 435,000 3,500 475,000 120,000 13,500 5,000 850 22,000 82,500 1,153,850 1,678,500 5 6 Sales 7 Cost of Goods Sold 8 Municipal Bond Interest Income 9 Salaries and Wages (all paid by 12/31/2019) 10 Bonuses 11 Advertising Costs 12 Meals Expense 13 Penalty Expense 14 Bad Debt Expense 15 Depreciation Expense 16 Casualty Insurance Expense 17 18 Totals 19 20 Book Income Before Taxes 21 22 23 24 25 26 27 28 29 30 31 32 524,650 34 35 30