Question
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
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
- -
Estimated tax payments made for 2020 48,000
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