ACCT TAX RETURNS

Complete the following for this assignment:

  • Prepare a 1120 U.S. Corporation Income Tax Return as Jim’s Auto Body, Inc.
  • Complete the appropriate schedules in the 1120 and Statement 1 – Other Deductions.
  • Prepare a 1065 U.S. Return of Partnership as Jim’s Auto Body, LLC.
  • Complete the appropriate schedules in the 1065, Statement 1 – Other Deductions and the 1065 Schedule K1 for Jim.

Note: This project is to be completed without the use of tax preparation software. Use of tax preparation software is considered cheating and is grounds for a failing grade.

Additional Information

Jim’s Auto Body (Inc., or LLC)
1122 Sesame Street
New York, NY, 10002
EIN 90-1234567
Dated incorporated January 1st, 2010

Jim Jameson
8701 Electric Avenue
New York, NY, 10002SSN: 123-45-6789

  • Jim Jameson took on Fred as a partner for the LLC. Fred owns 50% of all profits, losses, and capital. You do not have to complete Part 2 K, L, or M on the 1065 Schedule K1 (there is not enough information provided).
  • $4,500 salary expense is officer’s compensation for the corporation and guaranteed payment to partners for the LLC.
  • $55,000 equipment is 7-year property in its 5th year of service and was placed into service in the middle of the year, thus using the half-year convention. Use the correct table from the IRS—Publication 946: How to Depreciate Property—to determine the tax deductible depreciation. Form 4562 is not required.
  • Jim made four quarterly estimated tax payments of $800 each over the course of the year.
  • In accordance with IRS instructions: “Corporations with total receipts and total assets at the end of the tax year less than $250,000 are not required to complete Schedules L, M-1, and M-2” (Internal Revenue Service, n.d.). This also applies to the LLC.
  • For the 1065 Schedule K1, you will not have enough information to fill out Part 2 K, L, and M.

Jim’s Auto Body Revenues: Service Revenue

28,000

Total Revenue

28,000

Expenses:Salary Expense

4,500

Rent Expense

1,200

Utility Expense

300

Depreciation Expense

500

Insurance Expense

100

Supply Expense

400

7,000

Net Income

21,000

Jim’s Auto Body

Balance Sheet

As of April 30, 2015

AssetsCash

101,800

Acct Rec’able  20,000PP In

1,100

Equipment  55,000Accu. Dep.

500

Supplies

2,600

Total Assets

180,000
______________________________________________
______________________________________________

Liabilities and Stockholders’ Equity Liabilities :Accounts Payable

8,000

Salary Payable

3,000

Total Liabilities

11000.00

Stockholders’ Equity:Common Stock            150,000 Retained Earnings

19000

______________________________________________
______________________________________________

Total Stockholders’ Equity

169000.00

Total Liabilities and Stockholders’ Equity

180,000

______________________________________________
______________________________________________

Reference

Internal Revenue Service. (2015). Instructions for form 1120. Retrieved from https://www.irs.gov/pub/irs-pdf/i1120.pdf

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