On August 1, 2006, Janet Weiss and Brad Masters formed Pets R Us, Inc. to sell high-end pet supplies.
Pertinent Information is given below:
- Pets R Us business address is 2929 N. Carrolton Avenue, New Orleans, LA 70119, it’s phone number is (504) 555-2211 and it’s e-mail address is [email protected]
- The employer ID number is 11-11111111, and the principal business activity code is 453910.
- Brad and Janet each own 50% of the common stock; Janet is president and Brad is vice-president. No other class of stock is authorized. Both of them are full-time employees of the business. Janet’s social security number is 123-45-6789 and Brad’s is 987-65-4321.
- The business is an accrual method, calendar year taxpayer. Inventories are determined using FIFO and the lower of cost or market method.
- They use the straight-line method of depreciation for book purposes; they use MACRS for tax.
- In 2014, the corporation distributed $250,000 in cash dividends.
- During 2014, the business made estimated quarterly federal income tax payments of $90,000.
Required: Given the above information and the attached spreadsheet, prepare the form 1120 for Pets R Us for 2014.
ACCT 4152 Extra Credit Project – C Corporation (Form 1120) On August 1, 2006, Janet Weiss and Brad Masters formed Pets R Us, Inc. to sell high-end pet supplies. Pertinent Information is given below: · Pets R Us business address is 2929 N. Carrolton Avenue, New Orleans, LA 70119, it’s phone number is (504) 555-2211 and it’s e-mail address is
[email protected] · The employer ID number is 11-11111111, and the principal business activity code is 453910. · Brad and Janet each own 50% of the common stock; Janet is president and Brad is vice-president. No other class of stock is authorized. Both of them are full-time employees of the business. Janet’s social security number is 123-45-6789 and Brad’s is 987-65-4321. · The business is an accrual method, calendar year taxpayer. Inventories are determined using FIFO and the lower of cost or market method. · They use the straight-line method of depreciation for book purposes; they use MACRS for tax. · In 2014, the corporation distributed $250,000 in cash dividends. · During 2014, the business made estimated quarterly federal income tax payments of $90,000. Required: Given the above information and the attached spreadsheet, prepare the form 1120 for Pets R Us for 2014. Income Statement Pets R Us Income Statement 12/31/14 Income Gross sales$ 5,750,000.00 Sales Returns and allowances$ (200,000.00) Net Sales$ 5,550,000.00 Cost of Goods Sold$ (2,300,000.00) Gross Profit$ 3,250,000.00 Dividends Received (Note 1) $ 43,750.00 Interest Income State Bonds$ 15,000.00 Certificates of Deposit$ 20,000.00$ 35,000.00 Total Income$ 3,328,750.00 Expenses Salary - Officers Janet Weiss$ 262,500.00 Brad Majors$ 262,500.00$ 525,000.00 Salaries - Clerical and sales$ 725,000.00 Taxes - State, Local and Payroll$ 238,000.00 Repairs and Maintenance$ 140,000.00 Interest Expense Loans to Purchase State bonds$ 9,000.00 Other business loans$ 207,000.00$ 216,000.00 Advertising$ 58,000.00 Rental Expense$ 109,000.00 Depreciation (Note 2)$ 106,000.00 Charitable contributions$ 38,000.00 Employee Benefit programs$ 60,000.00 Premiums on Key-man life Insurance$ 40,000.00 Total Expenses$ 2,255,000.00 Net Income before Taxes$ 1,073,750.00 Federal Income Tax$ (356,023.00) Net Income per books$ 717,727.00 Note 1: These dividends were received from less-than-20% owned stock in US Corporations Note 2: Depreciation for tax purposes is $136,000. You don't have sufficient information to complete Form 4562 Sheet2 Pets R Us Balance Sheet 12/31/14 Assets1-Jan-1431-Dec-14 Cash$ 1,200,000.00$ 1,037,750.00 Trade Notes and accounts receivable$ 2,062,500.00$ 2,147,000.00 Inventories$ 2,750,000.00$ 3,030,000.00 Stock investment$ 1,125,000.00$ 1,125,000.00 State bonds$ 375,000.00$ 375,000.00 Certificates of Deposit$ 400,000.00$ 400,000.00 Prepaid Federal tax$ - 0$ 3,977.00 Buildings and other depreciable assets$ 5,455,000.00$ 5,455,000.00 Accumulated depreciation$ (606,000.00)$ (712,000.00) Land$ 812,500.00$ 812,500.00 Other assets$ 140,000.00$ 128,500.00 Total assets$ 13,714,000.00$ 13,802,727.00 Liabilities and Equity Accounts Payable$ 2,284,000.00$ 1,975,000.00 Other current liabilities$ 175,000.00$ 155,000.00 Mortgages$ 4,625,000.00$ 4,575,000.00 Capital Stock$ 2,500,000.00$ 2,500,000.00 Retained Earnings$ 4,130,000.00$ 4,597,727.00 Total liabilities and equity$ 13,714,000.00$ 13,802,727.00 Sheet3