Tax Return Problem---Form 1120

PREPARE FORM 1120 FOR CREATIVE KITCHENS

Creative Kitchens of 1400 Main Street, Dayton, Ohio, was formed on January 2,1976, Kitchens is in the buiness of retailing custom kitchens cabinets and accessories. The corporation's business code is 442299 and its employer identification number is 86-0806200.

Stock ownership and officer compensation are as follows:

R. Gee #347-54-1212 50% 60,000

E. Gee #379-12-5447 25% 20,000,

G. Gee #406-23-4567 25% 20,000.

R. Gee devotes 100% of his timeto the buines; E. Gee and G. Gee together devotes 50% of their time to the business. The coporation made cash distributions of $30,000 on March 1, 2014 and 20,000 on September 13, 2004. The distributions were made in proportion to stockholdings.

The corporation's only asset transaction involved the purchase of additional office equipment at a cost of 10,000. Estimated tax payments of $750 each were made on April 12, June 13, and December 13.

Additional Data Includes:

Sales $438,262 Repairs $800

Sales Returns $ 20,000 Bad Debt $ 2,000

Purchases 205,000 Rents 15,000

Dividends 1,000 Taxes 8,000

Interest-City of Contributions 1,400

Chicago bonds 1,500 Depreciation- from

Wages 30,000 Form 4562 20,000

Advertising 18,000

Financial Balance Sheet Beginning of year End of year

Cash 11,200 5,700

Accounts Recievable 65,000 53,062

Inventories 40,000 45,000

Investments 10,000 10,000

Depreciable assets 150,000 160,000

Accumulated depreciation (20,000) (40,000)

Accounts Payable 30,000 35,000

Capital Stock 150,000 150,000

Retain Earnings-

Inappropriated 76,200