logo Hurry, Grab up to 30% discount on the entire course
Order Now logo

Ask This Question To Be Solved By Our ExpertsGet A+ Grade Solution Guaranteed

expert
Motaz SData mining
(5/5)

765 Answers

Hire Me
expert
Lynette WhiteeGeneral article writing
(5/5)

678 Answers

Hire Me
expert
Joseph MburuStatistics
(/5)

952 Answers

Hire Me
expert
Doyle TaftEducation
(5/5)

932 Answers

Hire Me
Others
(5/5)

Prepare the 2020 corporate tax income return for J3 Manufacturing Corporation

INSTRUCTIONS TO CANDIDATES
ANSWER ALL QUESTIONS

On December 31, 2019, Jeff, John and James formed J3 Manufacturing Corp, a corporation created under the laws of the State of New York, for the principal purpose of manufacturing and distributing custom designed bikes. The company is authorized to issue 1000 shares of $1.00 par value common stock. Jeff, John, and James contributed the following property and each received 250 shares of $1.00 par value common stock. Jeff, John, and James elected themselves as officers of the J3 Mfg Corp and each received a salary of $250,000 for the tax year ending December 31, 2020.

 

 

1. Jeff FMV Adj. Basis

* Building $2,700,000 $1,250,000

* Land 300,000 230,000

*Mortgage (Debt) 800,000 800,000

2. John

* Inventory

975,000

450,000

* Account Receivables 825,000 825,000

* Accounts Payable 200,000 200,000

* NYS Muni Bonds (4.5%, FV= $650,000) 600,000 565,000

3.   James

* Cash

1,200,000

1,200,000

* 36,500 shares JPM Chase (acq. 01/01/19) 1,000,000 450,000

 

The company adopted a calendar year and is an accrual basis taxpayer. For the tax year ending December 31, 2020, the company had the following activity:

 

Sales $ 9,772,360

Inventory purchases 3,140,000

Ending Inventory 962,000

Dividend income from a 1% owned Company 285,000

Interest received on Muni Bonds 29,250

Interest Income – Money Market 6,500

Officer’s compensation 750,000

Supplies 192,000

Telephone expense 34,440

Meals and Entertainment 24,120

Employee salaries 860,000

Marketing 290,000

Travel 122,000

 

Utilities 29,000

Insurance 28,770

Repairs & Maintenance 22,415

Interest Expense 89,520

Employment benefits 85,000

Payroll taxes 57,375

Employee bonus accrual paid 3/14/2021 220,000

Officer’s Life Insurance 55,000

Purchased New Truck 132,000

Purchased New Equipment 216,000

Made improvements to building 305,000

Contribution to Cancer Research Foundation 400,000

Recorded a reserve for Bad Debts 80,000

Bad debt right-off 98,000

Book Depreciation:

* Building 16,190

* Equipment 70,000

* Truck 21,000

* Improvements 14,000

Federal Income Tax (accrued) 280,000

State Income Tax (accrued) 150,000

Book Income ?????

Paid distribution to each shareholders on 12/15/2020 100,000

 

Miscellaneous: The company elected to take the maximum §179 on the new equipment. The three officers devote 100% of their time to the business. [EIN: 22-3658908]. The bonus accrual is not included in employee salaries. The stock in JP Morgan represents less than 1% of JP’s outstanding stock.

 

a. Prepare the 2020 corporate tax income return for J3 Manufacturing Corporation;

 

b. Calculate earnings & profits and determine tax effect of distribution to shareholders. Assume E&P depreciation is the same as book depreciation;

 

c. Prepare an excel worksheet showing J3’s basis in assets contributed at December 31, 2019;

 

d. Prepare an excel worksheet showing shareholder’s basis in stock at December 31, 2019, and December 31, 2020.

 

(5/5)
Attachments:

Related Questions

. The fundamental operations of create, read, update, and delete (CRUD) in either Python or Java

CS 340 Milestone One Guidelines and Rubric  Overview: For this assignment, you will implement the fundamental operations of create, read, update,

. Develop a program to emulate a purchase transaction at a retail store. This  program will have two classes, a LineItem class and a Transaction class

Retail Transaction Programming Project  Project Requirements:  Develop a program to emulate a purchase transaction at a retail store. This

. The following program contains five errors. Identify the errors and fix them

7COM1028   Secure Systems Programming   Referral Coursework: Secure

. Accepts the following from a user: Item Name Item Quantity Item Price Allows the user to create a file to store the sales receipt contents

Create a GUI program that:Accepts the following from a user:Item NameItem QuantityItem PriceAllows the user to create a file to store the sales receip

. The final project will encompass developing a web service using a software stack and implementing an industry-standard interface. Regardless of whether you choose to pursue application development goals as a pure developer or as a software engineer

CS 340 Final Project Guidelines and Rubric  Overview The final project will encompass developing a web service using a software stack and impleme