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For this assignment, you will complete two tax returns
(Corporation Return and Partnership Return), for 175 points
each. You may use the tax software found at
http://accountants.intuit.com/tax/proseries/
Please note there is a limit of 5 returns per session.
PART I – Tax Return #1, Corporate Return
Background
Jane Collier, James Taye, and Steve Allwine each own one-third
of the common stock of Tasty Treats and Beverages. The
corporation was incorporated on April 3, 2004. It has only one
class of stock outstanding and operates as a C corporation for
tax purposes. Tasty Treats and Beverages caters kid-friendly
social events.
Located at 1215 Blue Horizon, Dallas, TX 12234.
Employer Identification Number is 12-34567890.
Business activity is catering food. Its business activity code is
722300.
The shareholders also work as officers for the corporation as
follows:
Jane is the chief executive officer and president (Social Security
number 242-62-5786).
James is the executive vice president and chief operating officer
(Social Security number 563-58-8923).
Steve is the vice president of finance (Social Security number
575-58-1572).
All officers devote 100% of their time to the business
All officers are U.S. citizens.
Use the accrual method of accounting and have a calendar year-
end.
Four equal estimated tax payments of $28,000 each quarter. Its
tax liability last year was $85,000.
If it has overpaid its federal tax liability, the corporation would
like to receive a refund.
Dividend paid of $20,000 to its shareholders on October 1. The
Corporation had ample earnings and profits (E&P) to absorb the
distribution.
Financial Statements
Tasty Treats and Beverages, Inc.
Income Statement
For year ended December 31, 2013
Revenue from sales
1,500,000
Sales returns and allowances
(25,000)
Cost of goods sold
(325,000)
Gross profit from operations
1,150,000
Other Income:
Capital loss
(7,500)
Dividend income
15,000
Interest income
12,000
Gross income
1,169,500
Expenses:
Compensation
(750,000)
Depreciation
(12,000)
Bad debt expense
(7,800)
Meals and entertainment
(3,000)
Maintenance
(2,500)
Property taxes
(10,000)
State income taxes
(30,000)
Other taxes
(11,000)
Rent
(28,000)
Interest
(7,300)
Advertising
(6,200)
Professional services
(5,000)
Employee benefits
(8,000)
Supplies
(2,500)
Other expenses
(1,750)
Total expenses
(885,050)
Income before taxes
284,450
Federal income tax expense
96,713
Net income after taxes
187,737
Tasty Treats and Beverages, Inc.
Balance Sheet
December 31, 2013
ASSETS
January 2013
December 2013
Cash
175,000
190,000
Accounts Receivable
63,000
54,000
Allowance for doubtful accounts
(8,000)
(7,000)
Inventory
225,000
275,000
US government bonds
30,000
25,000
State and local bonds
50,000
50,000
Investments in stock
325,000
335,000
Fixed assets
475,000
485,000
Accumulated depreciation
(198,000)
(215,000)
Other assets
11,000
12,000
Total assets
1,148,000
1,204,000
Liabilities and Stockholder's Equity
Accounts payable
225,000
200,000
Other current liabilities
135,000
55,000
Other liabilities
75,000
68,263
Capital stock
250,000
250,000
Retained earnings
463,000
630,737
Total liabilities and stockholder's equity
1,148,000
1,204,000
Additional Information
Inventory-related purchases during 2013 were $175,000. It
values its inventory based on cost using the FIFO inventory cost
flow method. Assume the rules of §263A do not apply.
Of the $12,000 interest income, $1,500 was from a City of Dees
bond that was used to fund public activities (issued in 2011),
$1,750 was from an Border city bond used to fund private
activities (issued in 2004), $2,500 was from a U.S. Treasury
bond, and the remaining $6,250 was from a money market
account.
Dividend income came from ABC Inc. Owned 10,000 shares of
the stock in ABC Inc. at the beginning of the year. This
represented 10 percent of outstanding stock.
On September 1, 2013, the corporation sold 1,000 shares of its
ABC stock for $15,000. It had originally purchased these shares
on June 13, 2006, for $7,500. After the sale, the Corporation
owned 9 percent of ABC.
compensation is as follows:
Jane $175,000
James $150,000
Steve $150,000
Other $275,000
The Corporation wrote off $10,000 in accounts receivable as
uncollectible during the year.
Regular tax depreciation was $28,000. None of the depreciation
should be claimed on Form 1125A.
The $7,300 interest expense was from a business loan.
Other expenses include $3,000 for premiums paid on term life
insurance policies for which Tasty Treats and Beverages, Inc. is
the beneficiary. The policies cover the lives of Jane, James, and
Steve.
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For this assignment, you will complete two tax returns (Corporation .docx

  • 1. For this assignment, you will complete two tax returns (Corporation Return and Partnership Return), for 175 points each. You may use the tax software found at http://accountants.intuit.com/tax/proseries/ Please note there is a limit of 5 returns per session. PART I – Tax Return #1, Corporate Return Background Jane Collier, James Taye, and Steve Allwine each own one-third of the common stock of Tasty Treats and Beverages. The corporation was incorporated on April 3, 2004. It has only one class of stock outstanding and operates as a C corporation for tax purposes. Tasty Treats and Beverages caters kid-friendly social events. Located at 1215 Blue Horizon, Dallas, TX 12234. Employer Identification Number is 12-34567890. Business activity is catering food. Its business activity code is 722300. The shareholders also work as officers for the corporation as follows: Jane is the chief executive officer and president (Social Security number 242-62-5786). James is the executive vice president and chief operating officer (Social Security number 563-58-8923). Steve is the vice president of finance (Social Security number 575-58-1572). All officers devote 100% of their time to the business All officers are U.S. citizens. Use the accrual method of accounting and have a calendar year- end. Four equal estimated tax payments of $28,000 each quarter. Its tax liability last year was $85,000. If it has overpaid its federal tax liability, the corporation would like to receive a refund.
  • 2. Dividend paid of $20,000 to its shareholders on October 1. The Corporation had ample earnings and profits (E&P) to absorb the distribution. Financial Statements Tasty Treats and Beverages, Inc. Income Statement For year ended December 31, 2013 Revenue from sales 1,500,000 Sales returns and allowances (25,000) Cost of goods sold (325,000) Gross profit from operations 1,150,000 Other Income: Capital loss (7,500) Dividend income 15,000 Interest income
  • 3. 12,000 Gross income 1,169,500 Expenses: Compensation (750,000) Depreciation (12,000) Bad debt expense (7,800) Meals and entertainment (3,000) Maintenance (2,500) Property taxes (10,000) State income taxes (30,000) Other taxes (11,000) Rent
  • 4. (28,000) Interest (7,300) Advertising (6,200) Professional services (5,000) Employee benefits (8,000) Supplies (2,500) Other expenses (1,750) Total expenses (885,050) Income before taxes 284,450 Federal income tax expense 96,713 Net income after taxes 187,737 Tasty Treats and Beverages, Inc.
  • 5. Balance Sheet December 31, 2013 ASSETS January 2013 December 2013 Cash 175,000 190,000 Accounts Receivable 63,000 54,000 Allowance for doubtful accounts (8,000) (7,000) Inventory 225,000 275,000 US government bonds 30,000
  • 6. 25,000 State and local bonds 50,000 50,000 Investments in stock 325,000 335,000 Fixed assets 475,000 485,000 Accumulated depreciation (198,000) (215,000) Other assets 11,000 12,000 Total assets 1,148,000 1,204,000
  • 7. Liabilities and Stockholder's Equity Accounts payable 225,000 200,000 Other current liabilities 135,000 55,000 Other liabilities 75,000 68,263 Capital stock 250,000 250,000 Retained earnings 463,000 630,737 Total liabilities and stockholder's equity 1,148,000 1,204,000
  • 8. Additional Information Inventory-related purchases during 2013 were $175,000. It values its inventory based on cost using the FIFO inventory cost flow method. Assume the rules of §263A do not apply. Of the $12,000 interest income, $1,500 was from a City of Dees bond that was used to fund public activities (issued in 2011), $1,750 was from an Border city bond used to fund private activities (issued in 2004), $2,500 was from a U.S. Treasury bond, and the remaining $6,250 was from a money market account. Dividend income came from ABC Inc. Owned 10,000 shares of the stock in ABC Inc. at the beginning of the year. This represented 10 percent of outstanding stock. On September 1, 2013, the corporation sold 1,000 shares of its ABC stock for $15,000. It had originally purchased these shares on June 13, 2006, for $7,500. After the sale, the Corporation owned 9 percent of ABC. compensation is as follows: Jane $175,000 James $150,000 Steve $150,000 Other $275,000 The Corporation wrote off $10,000 in accounts receivable as uncollectible during the year. Regular tax depreciation was $28,000. None of the depreciation should be claimed on Form 1125A. The $7,300 interest expense was from a business loan. Other expenses include $3,000 for premiums paid on term life insurance policies for which Tasty Treats and Beverages, Inc. is the beneficiary. The policies cover the lives of Jane, James, and Steve.