XYZ is a calendar-year corporation that began business on January 1, 2021. For the year, it reported the following information in its current-year audited income statement. Notes with important tax information are provided below. Use Exhibit 16-6. XYZ corporation Income statement for current year Book Income Revenue from sales $ 40, eee, 280 Cost of Goods Sold (27, see, eae) Gross profit $ 13, eee, eee Other income: Income from investment in corporate stock Interest income Capital gains (losses) Gain or loss from disposition of fixed assets Miscellaneous income Gross Income Expenses: Compensation Stock option compensation Advertising Repairs and Maintenance Rent Bad Debt expense Depreciation Warranty expenses Charitable donations Meals (all at restaurants) Goodwill impairment Organizational expenditures Other expenses Total expenses Income before taxes Provision for income taxes Net Income after taxes 300,eee1 20,eee2 (4,690) 3,eee 5e,ese $ 13,369,880 (7,500,000) (2ee, eee) (1,350,000) (75,000) (22,000) (41, eee) (1,489, eee)? (70, eee) (580,eee) (18,280) (30,000) le (44,899) 11 (140,89 12 $ (11,390,000) $ 1,979,00 (480,eee) 13 $ 1,579,000 1. XYZ owns 30% of the outstanding Hobble Corporation (HC) stock. Hobble Corporation reported $1,000,000 of income for the year. XYZ accounted for its investment in HC under the equity method, and it recorded its pro rata share of HC's earnings for the year. HC also distributed a $200.000 dividend to XYZ. For tax purposes. HC reports the actual dividend received as income, not the pro rata share of HC's earnings. 2. Of the $20.000 interest income, $5,000 was from a City of Seattle bond. $7.000 was from a Tacoma City bond. $6,000 was from a fully taxable corporate bond, and the remaining $2,000 was from a money market account. 3. This gain is from equipment that XYZ purchased in February and sold in December (i.e., it does not qualify as $1231 gain). 4. This includes total officer compensation of $2.500.000 (no one officer received more than $1.000.000 compensation). 5. This amount is the portion of incentive stock option compensation that was expensed during the year (recipients are officers). 6.XYZ actually wrote off $27.000 of its accounts receivable as uncollectible. 7. Tax depreciation was $1,900,000. 8. In the current year, XYZ did not make any actual payments on warranties it provided to customers. 9. XYZ made $500,000 of cash contributions to qualified charities during the year. The donations are qualified charitable contributions for purposes of determining the charitable contribution limitation. 10. On July 1 of this year XYZ acquired the assets of another business. In the process, it acquired $300.000 of goodwill. At the end of the year. XYZ wrote off $30.000 of the goodwill as impaired. 11. XYZ expensed all of its organizational expenditures for book purposes. XYZ expensed the maximum amount of organizational expenditures allowed for tax purposes. 12. The other expenses do not contain any items with book-tax differences. 13. This is an estimated tax provision (federal tax expense) for the year. Assume that XYZ is not subject to state income taxes. Estimated tax information: XYZ made four equal estimated tax payments totaling $360.000 ($90.000 per quarter). For purposes of estimated tax liabilities, assume XYZ was in existence in 2020 and that in 2020 it reported a tax liability of $500,000. During 2021, XYZ determined its taxable income at the end of each of the four quarters as follows: Cumulative taxable Quarter-end income (loss) First $ 480,000 Second $ 1,100,000 Third $ 1,480,000 Finally, assume that XYZ is not a large corporation for purposes of estimated tax calculations. (Do not round Intermediate calculations. Round your answers to the nearest dollar amount.) d. Complete XYZ Form 1120, page 1 (Input all the values as positive numbers. Use 2021 tax rules regardless of year on tax form.) 112016: 1120 Page 1 Form 1120 Laparitain iraay Helene ] a Ceracittasi sani pithechi turn U.S. Corporation Income Tax Return CMSN 1545-0123 deyer 2.00 ar le parteci 2020 Gala www.gutum20 foods that women New SEplea ilaute TYPE XYZ Capo OR Numero del 10., drudin Direction PRINT D21 |caya N, at all ur luray as | tamil se) ] statute actress salar 2 Sidhu ] p Seda Seca | (1] ht dos 101 In or | Bobo. 12 a good old lach om 112A spol. s ro 4 DSC Income Is Capital and in alle Se Dom 1120 normem 4/11, 17 cham40) 10 Odth 11 Ion Add rough 10 11 13 14 15 1 18 10 20 21 25 30 31 12 amprecoolice direchom 1125) 121 13 de orienced 14 H 15 de 16 Mb 1/ Two 15 r Deduction 19 bulance (800 | 20 Depechelen francem 45 med en form 112A cubana matum Instructions 21 Dagon for limitations 2 123doppen deduction) | 24 12 mdr | umar talukara | Heleti solalareetd) 27 dal ducha Adres 12 touch20 | 2 ore de repenting addicina do Sutra retro 11 123 Nisodio | d deduru (Studies C, Iran 24 Ic Added 23 score. Sed ne 22 min 21 dicen [si Idul kar aztechia J, Karl I, Iran 11 Tax 2009 bydel12) Soal penis, dd Sarad betyder 2 Refundable sama bepantly. Se rendre Check from a watu Credits, and Amundowed in the old 12,34 Payments Olen tot 12u is nywa |-atus | car pero por los www.com, sunt doubt my Wc und becomed and chechend popper) and women who papa kwa Sign Mayda mwih Here | alar | spam' PIN Pald Duck Preparer FEIN Use Only Fines Per perseri tuduction et Notice we punto indructen CLN 114500 Fem 112 IHS FORMESA SIMULATION OF AN OFFICIALUS. TAK HILLS NOI THE OFFICIAL FORSELISEL. DO NDIUSE IHSG FOR TAX PUINEX OR FOR ANY IS DI IHAN EDUCATIONAL W2021 Mcwill Education 34 1120 PG 1 ment XYZ is a calendar-year corporation that began business on January 1, 2021. For the year, it reported the following information in its current-year audited income statement. Notes with important tax information are provided below. Use Exhibit 16-6. XYZ corporation Income statement for current year Book Income Revenue from sales $ 40, eee, 280 Cost of Goods Sold (27, see, eae) Gross profit $ 13, eee, eee Other income: Income from investment in corporate stock Interest income Capital gains (losses) Gain or loss from disposition of fixed assets Miscellaneous income Gross Income Expenses: Compensation Stock option compensation Advertising Repairs and Maintenance Rent Bad Debt expense Depreciation Warranty expenses Charitable donations Meals (all at restaurants) Goodwill impairment Organizational expenditures Other expenses Total expenses Income before taxes Provision for income taxes Net Income after taxes 300,eee1 20,eee2 (4,690) 3,eee 5e,ese $ 13,369,880 (7,500,000) (2ee, eee) (1,350,000) (75,000) (22,000) (41, eee) (1,489, eee)? (70, eee) (580,eee) (18,280) (30,000) le (44,899) 11 (140,89 12 $ (11,390,000) $ 1,979,00 (480,eee) 13 $ 1,579,000 1. XYZ owns 30% of the outstanding Hobble Corporation (HC) stock. Hobble Corporation reported $1,000,000 of income for the year. XYZ accounted for its investment in HC under the equity method, and it recorded its pro rata share of HC's earnings for the year. HC also distributed a $200.000 dividend to XYZ. For tax purposes. HC reports the actual dividend received as income, not the pro rata share of HC's earnings. 2. Of the $20.000 interest income, $5,000 was from a City of Seattle bond. $7.000 was from a Tacoma City bond. $6,000 was from a fully taxable corporate bond, and the remaining $2,000 was from a money market account. 3. This gain is from equipment that XYZ purchased in February and sold in December (i.e., it does not qualify as $1231 gain). 4. This includes total officer compensation of $2.500.000 (no one officer received more than $1.000.000 compensation). 5. This amount is the portion of incentive stock option compensation that was expensed during the year (recipients are officers). 6.XYZ actually wrote off $27.000 of its accounts receivable as uncollectible. 7. Tax depreciation was $1,900,000. 8. In the current year, XYZ did not make any actual payments on warranties it provided to customers. 9. XYZ made $500,000 of cash contributions to qualified charities during the year. The donations are qualified charitable contributions for purposes of determining the charitable contribution limitation. 10. On July 1 of this year XYZ acquired the assets of another business. In the process, it acquired $300.000 of goodwill. At the end of the year. XYZ wrote off $30.000 of the goodwill as impaired. 11. XYZ expensed all of its organizational expenditures for book purposes. XYZ expensed the maximum amount of organizational expenditures allowed for tax purposes. 12. The other expenses do not contain any items with book-tax differences. 13. This is an estimated tax provision (federal tax expense) for the year. Assume that XYZ is not subject to state income taxes. Estimated tax information: XYZ made four equal estimated tax payments totaling $360.000 ($90.000 per quarter). For purposes of estimated tax liabilities, assume XYZ was in existence in 2020 and that in 2020 it reported a tax liability of $500,000. During 2021, XYZ determined its taxable income at the end of each of the four quarters as follows: Cumulative taxable Quarter-end income (loss) First $ 480,000 Second $ 1,100,000 Third $ 1,480,000 Finally, assume that XYZ is not a large corporation for purposes of estimated tax calculations. (Do not round Intermediate calculations. Round your answers to the nearest dollar amount.) d. Complete XYZ Form 1120, page 1 (Input all the values as positive numbers. Use 2021 tax rules regardless of year on tax form.) 112016: 1120 Page 1 Form 1120 Laparitain iraay Helene ] a Ceracittasi sani pithechi turn U.S. Corporation Income Tax Return CMSN 1545-0123 deyer 2.00 ar le parteci 2020 Gala www.gutum20 foods that women New SEplea ilaute TYPE XYZ Capo OR Numero del 10., drudin Direction PRINT D21 |caya N, at all ur luray as | tamil se) ] statute actress salar 2 Sidhu ] p Seda Seca | (1] ht dos 101 In or | Bobo. 12 a good old lach om 112A spol. s ro 4 DSC Income Is Capital and in alle Se Dom 1120 normem 4/11, 17 cham40) 10 Odth 11 Ion Add rough 10 11 13 14 15 1 18 10 20 21 25 30 31 12 amprecoolice direchom 1125) 121 13 de orienced 14 H 15 de 16 Mb 1/ Two 15 r Deduction 19 bulance (800 | 20 Depechelen francem 45 med en form 112A cubana matum Instructions 21 Dagon for limitations 2 123doppen deduction) | 24 12 mdr | umar talukara | Heleti solalareetd) 27 dal ducha Adres 12 touch20 | 2 ore de repenting addicina do Sutra retro 11 123 Nisodio | d deduru (Studies C, Iran 24 Ic Added 23 score. Sed ne 22 min 21 dicen [si Idul kar aztechia J, Karl I, Iran 11 Tax 2009 bydel12) Soal penis, dd Sarad betyder 2 Refundable sama bepantly. Se rendre Check from a watu Credits, and Amundowed in the old 12,34 Payments Olen tot 12u is nywa |-atus | car pero por los www.com, sunt doubt my Wc und becomed and chechend popper) and women who papa kwa Sign Mayda mwih Here | alar | spam' PIN Pald Duck Preparer FEIN Use Only Fines Per perseri tuduction et Notice we punto indructen CLN 114500 Fem 112 IHS FORMESA SIMULATION OF AN OFFICIALUS. TAK HILLS NOI THE OFFICIAL FORSELISEL. DO NDIUSE IHSG FOR TAX PUINEX OR FOR ANY IS DI IHAN EDUCATIONAL W2021 Mcwill Education 34 1120 PG 1 ment