Corporate Tax Return Project
ACCTG 410
In this scenario, you will practice entering the following:
Balance Sheet
Income Statement
Instructions
This practice return will help you become more familiar with corporate return preparation. Use the scenario information and the attached source documents to complete the 2023 Federal Form. 1120 and any schedules necessary.
Forms may be obtained at www.irs.gov.
For any information not provided, please use reasonable assumptions.
Attached Source Documents
Balance Sheet
Income Statement
ADDITIONAL INFORMATION
The company provided the following additional information:
The company took a physical count of its inventory on the last day of the year. On that date, it was determined that ending inventory was $360,000. This is not reflected in the financial statements below.
Dividends received were from stock investment in less than 20% owned U.S. corporations.
The corporation’s estimated bad debt expense for the year was $5,000. Actual bad debts were $1,000.
Tax depreciation for the year was $50,000
Meals and Entertainment include the corporation’s expenses for a suite at Harrisburg River Front Stadium, home of professional baseball Harrisburg Senators. The cost of the suite was $10,000, which includes event tickets for $4,000.
Life Insurance Premiums were paid on term policies covering the lives of two owners. The corporation is the beneficiary.
Each of the four $37,500 timely made estimated tax payments were recorded as Federal Income Taxes Paid.
The corporation distributed a cash dividend of $60,000 during the year.
FINANCIAL STATEMENTS
A tentative Balance Sheet and Income Statement for the corporation are given below.