On February 12, 2015, Nancy Trout and Delores LakeformedAngel Corporation to sell autographed Baseball Memorabilia.
Pertinent information regarding Angel is summarized as follows:
The business address is 27 Gene Autry Way, Tustin CA 92782; its telephone number is (714) 555-5555; and its e-mail address is[email protected].
The employer identification number is 27-2727272, and the principal business activity code is 451110.
Nancy owns 50% of the common stock and is president of the company, and Delores owns 50% of the common stock and is vice president of the company. No other class of stock is authorized.
Both Nancy and Delores are Full-time employees of Angel Corporation. Nancy’s Social Security number is 714-66-6788, and Delores’s Social Security number is 123-45-6784.
Angel is an accrual method, calendar year taxpayer. Inventories are determined using FIFO and the lower of cost or market method.
Angel uses the straight-line method of deprecation for book purposes and accelerated depreciation (MACRS) for tax purposes.
During 2019, the corporation distributed cash dividends of $80,000.
During 2019, Angel Corporation made estimated tax payments of $27,000 each quarter to the IRS. Prepare a Form 1120 for Angel for tax year 2019. Suggested software: ProConnect Tax Online provided to you on Canvas.
Angel’s financial statements for 2019 are show below:
You are not provided enough detailed information to complete a Form 4562 (depreciation). If you solve this problem using Intuit ProConnect, enter the amount of deprecation on line 20 of Form 1120
Using the data provided, prepare the 2019 form 1120 and related schedules and statements as you deemed necessary. You can use the Intuit tax preparation software provided to you in Canvas or if you have another software program you can use that.Please do not prepare by hand.In addition, you need to prepare an explanation write up on how you treated the items is the facts above. The explanation is meant to determine if you understand the 1120 assignment. Please explain how you determined what is taxable, not taxable, deductible or not deductible. Also please explain to me how the Schedule L, Schedule M-1, M-2 and M-3 (if required) interrelate with each other. Provide planning ideas to Nancy and Delores for 2020. If the facts aren't in the case, please make your own assumptions and document them. If you do not prepare an adequate write up you will not receive any credit for the assignment. This assignment is worth 75 points of your overall grade. Upload your assignment into Canvas before 11:55 pm on the deadline date.
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