Using the Form 1120 Illustrated from Chapter 3 for inspiration, prepare and submit for grading a completed 2020 Form 1120 for Swift Corporation. Use the Corporate Tax Return_Student worksheet as your primary source of information. In case needed information is missing from the worksheet, you can rely on the Form 1120 Illustrated as a guide.

Taxable Corporation Return Assignment

General information:

Tax year2020

Corporate name: Swift Corporation

Date of formation: 1/10/1985

Business activity: Retail

Product: Men's clothing

Business address:

6210 Norman Street

Buffalo, TX 75831

Employer identification number: 11-1111111

Shareholder: James Brown

Percent of ownership: 50%

Corporate office: President

Salary 70,000

Social security number: 123-45-6789

Shareholder: Martha Swift

Percent of ownership: 50%

Corporate office: Secretary-Treasurer

Salary 85,000

Social security number: 987-65-4321

Accounting method: Accrual

Accounting period: Calendar-year

Bad debt method: Specific chargeoff

Inventory method: Lower of cost or market

Depreciation method: book: Straight-line

Depreciation method: tax: Straight-line

Cash dividends distributed 35,000

Profit and loss information:

Debit Credit

Gross sales 1,120,000

Sales returns and allowances 60,000

Purchases 480,000

Dividends received from stock (Note 1) 50,000

Interest income - state bonds 6,000

Interest income - certificates of deposit 8,000

Premiums on term life insurance (Note 2)10,000

Salaries - officers 155,000

Salaries - clerical and sales 120,000

Taxes (state, local, and payroll) 60,000

Repairs 38,000

Interest expense - loan to purchase state bonds2,400

Interest expense - other business loans 14,000

Advertising 7,000

Rental expense 22,000

Depreciation 19,800

Other deductions 24,000

Note 1 - less-than-20% owned U.S. corporation

Note 2 - policies on Brown and Swift, corporation is beneficiary

Balance sheet information:

Beginning of year End of year

Assets:

Cash 240,000 177,450

Trade notes and accounts receivable 104,200 142,300

Inventories 200,000 256,000

Certificates of deposit 150,000 150,000

State bonds 100,000 100,000

Prepaid federal tax 4,068

Stock investment 300,000 400,000

Buildings and other depreciable assets 120,000 120,000

Accumulated depreciation (44,400) (64,200)

Land 10,000 10,000

Other assets 1,800 1,000

Total assets 1,181,600 1,296,618

Liabilities and Equity:

Accounts payable 150,000 125,000

Other current liabilities 40,150 36,300

Mortgages 105,000 100,000

Capital stock 250,000 250,000

Retained earnings 636,450 785,318

Total liabilities and equity 1,181,600 1,296,618

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Estimated tax payments made for 2020 48,000