Part 1
Prepare a complete year 2023 federal corporate tax return (Form 1120) for Acme Corporation, including all necessary schedules and attachments.
Balance Sheet 1/1/24 12/31/24
|
Cash
|
40,000
|
600,000
|
|
Investments
|
|
60,000
|
|
Accounts Receivable
|
|
200,000
|
|
Equipment (less depreciation of $30,000)
|
|
40,000
|
|
Total Assets
|
40,000
|
900,000
|
|
Accounts Payable
|
|
260,000
|
|
Common Stock
|
40,000
|
40,000
|
|
Retained Earnings
|
|
600,000
|
|
Total Liab. And Equity
|
40,000
|
900,000
|
|
Income Statement Sales
|
4,000,000
|
|
|
Tax exempt interest
|
30,000
|
|
|
Dividends Received on Microsoft Stock
|
120,000
|
|
|
Salaries and Wages
|
(2,800,000)
|
|
|
Supplies and materials
|
(180,000)
|
|
|
Meals (50% deductible)
|
(140,000)
|
|
|
Depreciation
|
(30,000)
|
|
|
Charitable contributions
|
(400,000)
|
|
|
Book Income
|
600,000
|
|
Other Information
● You are the sole shareholder of Acme Corporation.
● Please note that the financial statements have already been issued using the information above and will not be amended.
● You formed Acme by contributing $40,000 to the corporation in return for 100 shares
(i.e., 100%) of stock on 1/01/24. You named yourself to the role of President and every other officer position. Your Acme salary for the year 2024 was $500,000. (This is included in the salary amount reported on the income statement.) Running Acme is your full time job.
● Acme’s sole depreciable asset was equipment purchased on 7/01/24 for $70,000. For tax purposes, you will maximize the depreciation expense.
● Acme also received a 2024 K-1 for a partnership interest it owned during the year. The K-1 showed ordinary income of $80,000 and interest income of $10,000. No partnership income was recorded on the financial statements.
● Acme owns less than 1% of Microsoft stock outstanding.
● Acme has no cost of goods sold.
● Please make up appropriate non-financial information that is not included above (e.g., address, etc.).
● IRS forms can be obtained at: https://www.irs.gov/forms-instructions
Part 2
Complete an entirely separate year 2024 tax return (Form 1120-S) for Acme Corporation where an S election was made 1/1/24. The information from the Tax Return Assignment (copied below) will be used to complete this separate S corporation tax return and is copied below.
|
Balance Sheet
|
1/1/24
|
12/31/24
|
|
Cash
|
40,000
|
600,000
|
|
Investments
|
|
60,000
|
|
Accounts Receivable
|
|
200,000
|
|
Equipment (less depreciation of $30,000)
|
|
40,000
|
|
Total Assets
|
40,000
|
900,000
|
|
Accounts Payable
|
|
260,000
|
|
Common Stock
|
40,000
|
40,000
|
|
Retained Earnings
|
|
600,000
|
|
Total Liab. And Equity
|
40,000
|
900,000
|
|
Income Statement Sales
|
4,000,000
|
|
|
Tax exempt interest
|
30,000
|
|
|
Dividends Received on Microsoft Stock
|
120,000
|
|
|
Salaries and Wages
|
(2,800,000)
|
|
|
Supplies and materials
|
(180,000)
|
|
|
Meals (50% deductible)
|
(140,000)
|
|
|
Depreciation
|
(30,000)
|
|
|
Charitable contributions
|
(400,000)
|
|
|
Book Income
|
600,000
|
|
Other Information
● You are the sole shareholder of Acme Corporation.
● Please note that the financial statements have already been issued using the information above and will not be amended.
● You formed Acme by contributing $40,000 to the corporation in return for 100 shares
(i.e., 100%) of stock on 1/01/24. You named yourself to the role of President and every other officer position. Your Acme salary for the year 2024 was $500,000. (This is included in the salary amount reported on the income statement.) Running Acme is your full time job.
● Acme’s sole depreciable asset was equipment purchased on 7/01/24 for $70,000. For tax purposes, you will maximize the depreciation expense.
● Acme also received a 2024 K-1 for a partnership interest it owned during the year. The K-1 showed ordinary income of $80,000 and interest income of $10,000. No partnership income was recorded on the financial statements.
● Acme owns less than 1% of Microsoft stock outstanding.
● Acme has no cost of goods sold.
● Please make up appropriate non-financial information that is not included above (e.g., address, etc.).
● IRS forms can be obtained at: https://www.irs.gov/forms-instructions