Use The Following Information For JKeb Corporation To Comple

Use The Following Information For Jkeb Corporation To Complete Pages 1

Use the following information for JKEB Corporation to complete pages 1 through 3 of the 2011 Form 1120. Address: 1994 Lincoln St, Township, FL 34691 Employer Identification Number: [not provided] Date Incorporated: [not provided] Accounting Method: Accrual

Use the following link to determine the principal business activity code: IRS Form 1120. JKEB Corporation's activities are focused more on sporting goods than apparel. They are not a subsidiary of another corporation and no entity owns more than 20% of JKEB Inc.

Financial details for 2011 include total assets of $2,250,000, total receipts/sales of $3,750,000, returns and allowances totaling $187,500, and a cost of goods sold amount of $950,000. Income components include dividends from less than 20% owned investees of $300,000, dividends from 20% or more owned investees of $15,000, interest income of $5,000, and income from store vending machines $1,500.

Expenses and deductions encompass salaries and wages of $150,000, bad debts of $12,500, rent of $40,000, charitable contributions during 2011 totaling $2,000, advertising expenses of $5,000, repairs costing $2,750, and tax deposits paid during 2011 amounting to $10,000.

Paper For Above instruction

The following paper details the process of accurately completing pages 1 through 3 of the 2011 Form 1120 for JKEB Corporation, based on the provided financial and operational data. This comprehensive approach ensures compliance with IRS guidelines and maximizes deductions while correctly reporting income and expenses.

Introduction

The IRS Form 1120 is the U.S. Corporation Income Tax Return, used by corporations to report their income, gains, losses, deductions, credits, and to calculate tax liability. Proper completion of this form requires accurate financial figures, understanding of applicable tax codes, and adherence to IRS instructions. This paper walks through the process of filling out the first three pages of Form 1120 for JKEB Corporation, a corporation engaged predominantly in sporting goods retail, with specified financial and operational data provided.

Step 1: Identifying Basic Information

The first step involves entering the corporation's basic information, including the address (1994 Lincoln St, Township, FL 34691), Employer Identification Number (EIN), date of incorporation, and accounting method (accrual). Since the EIN is not specified, this should be obtained from the corporation's IRS filings. Additionally, the correct principal business activity code must be selected based on the IRS's list, focusing on sporting goods retail.

Step 2: Determining the Principal Business Activity Code

The principal business activity code can be identified by consulting the IRS's Schedule K-1 instructions or the coding guide. For a sporting goods store, the relevant code is typically 451110 – "Sporting Goods Stores."

Step 3: Reporting Income

Line 1a of Form 1120 requires total receipts or sales, which are reported as $3,750,000. Adjustments such as returns and allowances ($187,500) must be subtracted to arrive at net sales, which amount to $3,562,500. Other income streams include dividends, interest, and income from vending machines:

• Dividends from less than 20% owned investees: $300,000
• Dividends from 20% or more owned investees: $15,000
• Interest income: $5,000
• Income from vending machines: $1,500

This combination of income sources must be accurately reported on the relevant lines of Form 1120, ensuring total income is correctly totaled.

Step 4: Calculating Cost of Goods Sold and Gross Profit

The cost of goods sold (COGS) is reported as $950,000 on Schedule A, which reduces gross receipts to determine gross profit. Gross profit equals net sales ($3,562,500) minus COGS ($950,000), resulting in $2,612,500.

Step 5: Deducting Expenses

Expenses include salaries and wages ($150,000), bad debts ($12,500), rent ($40,000), charitable contributions ($2,000), advertising ($5,000), repairs ($2,750), and tax deposits ($10,000). These are reported on Schedule C and other relevant sections, contributing to taxable income reduction.

Step 6: Computing Taxable Income

The taxable income calculation involves subtracting total deductions from gross profit, along with other applicable adjustments. The result is then carried over to the income statement part of the form to compute the total tax liability.

Step 7: Finalizing the Return

Once all income, deductions, credits, and payments are accounted for, the form's pages 2 and 3 are filled out to determine the total tax owed or refund due. The form must be reviewed for accuracy and completeness before submission.

Conclusion

Completing pages 1 through 3 of Form 1120 for JKEB Corporation involves a systematic approach to report accurate financial data, select appropriate codes, and ensure all income and expenses are correctly documented. This process requires careful attention to IRS instructions, meticulous calculations, and a thorough understanding of corporate tax law to optimize compliance and taxation outcomes.

References

• Internal Revenue Service. (2023). Schedule C (Form 1120). IRS.gov. https://www.irs.gov/forms-pubs/about-schedule-c-form-1120
• Internal Revenue Service. (2023). Instructions for Form 1120. IRS.gov. https://www.irs.gov/instructions/i1120
• IRS. (2023). Principal Business Activity Codes. IRS.gov. https://www.irs.gov/businesses/small-businesses-self-employed/principal-business-activity-codes
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