On November 1, 2012, Janet Morton and Kim Wong formed Magic Kingdom, Inc, to sell gifts from a famous amusement park. Pertinent information regarding Magic Kingdom is summarized as follows: o Magic...

here


On November 1, 2012, Janet Morton and Kim Wong formed Magic Kingdom, Inc, to sell gifts from a famous amusement park. Pertinent information regarding Magic Kingdom is summarized as follows: o Magic Kingdom’s business address is 1010 Disney Way, Anaheim, CA 92804; its telephone number; and its e-mail address is [email protected]. o The employer identification number is 99-1111122, and the principal business activity code is 453220. o Janet and Kim each own 50% of the common stock; Janet is president and Kim is vice president of the company. No other class of stock is authorized. o Both Janet and Kim are full-time employees of Magic Kingdom. Janet’s Social Security number is 123-45-8888, and Kim’s Social Security number is 123-46- 6887. o Magic Kingdom is an accrual method, calendar year taxpayer. Inventories are determined using FIFO and the lower of cost or market method. Magic Kingdom uses the straight-line method of depreciation for book purposes and accelerated depreciation (MACRS) for tax purposes. o During 2018, the corporation distributed cash dividends of $250,000. Using the data, prepare the form 1120 and related schedules and statements as you deemed necessary. You will use the 2018 forms. You can use the Intuit tax preparation software provided to you or if you have another software program you can use that. 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. If the facts aren't in the case, please make your own assumptions and document them. This assignment is worth 75 points of your overall grade. Please turn in the assignment in class. Do not e mail the assignment unless you get prior approval from the professor. mailto:[email protected]