1120 US Corporation Income Tax Return as Jim’s Auto Body Inc
Business Finance
FULL INSTRUCTIONS are attached. Please see attachment for FULL INSTRUCTIONS.
Complete the following for this assignment:
- Prepare a 1120 U.S. Corporation Income Tax Return as Jim’s Auto Body, Inc.
- Complete the appropriate schedules in the 1120 and Statement 1 – Other Deductions.
- Prepare a 1065 U.S. Return of Partnership as Jim’s Auto Body, LLC.
- Complete the appropriate schedules in the 1065, Statement 1 – Other Deductions and the 1065 Schedule K1 for Jim.
Note: This project is to be completed without the use of tax preparation software. Use of tax preparation software is considered cheating and is grounds for a failing grade.
Additional Information needed to complete the assignment:
Link to forms needed to prepare 1120 US Corporation Income tax Return: https://www.irs.gov/forms-pubs-search?search=1120
Link to forms needed to prepare 1065 US Return of Partnership: https://www.irs.gov/forms-pubs-search?search=1065
Additional information needed to complete tax returns:
Jim’s Auto Body (Inc., or LLC)
1122 Sesame Street
New York, NY, 10002
EIN 90-1234567
Dated incorporated January 1st, 2010
Jim Jameson
8701 Electric Avenue
New York, NY, 10002SSN: 123-45-6789
- Jim Jameson took on Fred as a partner for the LLC. Fred owns 50% of all profits, losses, and capital. You do not have to complete Part 2 K, L, or M on the 1065 Schedule K1 (there is not enough information provided).
- $4,500 salary expense is officer’s compensation for the corporation and guaranteed payment to partners for the LLC.
- $55,000 equipment is 7-year property in its 5th year of service and was placed into service in the middle of the year, thus using the half-year convention. Use the correct table from the IRS—Publication 946: How to Depreciate Property—to determine the tax deductible depreciation. Form 4562 is not required.
- Jim made four quarterly estimated tax payments of $800 each over the course of the year.
- In accordance with IRS instructions: “Corporations with total receipts and total assets at the end of the tax year less than $250,000 are not required to complete Schedules L, M-1, and M-2” (Internal Revenue Service, n.d.). This also applies to the LLC.
- For the 1065 Schedule K1, you will not have enough information to fill out Part 2 K, L, and M.
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Jim’s Auto Body |
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Revenues: |
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Service Revenue |
$28,000.00 |
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Total Revenue |
$28,000.00 |
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Expenses: |
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Salary Expense |
$4,500.00 |
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Rent Expense |
$1,200.00 |
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Utility Expense |
$300.00 |
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Depreciation Expense |
$500.00 |
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Insurance Expense |
$100.00 |
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Supply Expense |
$400.00 |
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$7,000.00 |
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Net Income |
$21,000.00 |
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Jim’s Auto Body |
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Balance Sheet |
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As of April 30, 2015 |
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Assets |
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Cash |
$101,800.00 |
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Acct Rec’able |
20,000 |
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PP In |
$1,100.00 |
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Equipment |
55,000 |
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Accu. Dep. |
$500.00 |
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Supplies |
$2,600.00 |
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Total Assets |
$180,000.00 |
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______________________________________________ |
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Liabilities and Stockholders’ Equity |
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Liabilities: |
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Accounts Payable |
$8,000.00 |
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Salary Payable |
3,000 |
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Total Liabilities |
$11,000.00 |
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Stockholders’ Equity: |
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Common Stock |
150,000 |
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Retained Earnings |
$19,000.00 |
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______________________________________________ |
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______________________________________________ |
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Total Stockholders’ Equity |
$169,000.00 |
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Total Liabilities and Stockholders’ Equity |
$180,000.00 |
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