Problem:
My two shareholder and I provide businesses and individuals with office services including coping, mailing, secretarial, computer access to a variety of software programs and Internet service, and pick-up and delivery service. We were granted a corporate charter effective January 1, 2004, electing S status with equal holdings.
Each shareholder made a capital contribution of $10,000. One hundred shares of common stock were issued to each shareholder at a par value of $10.00 per share. The remainder of the capital contributions was posted to paid-in capital
The corporation filed Form 2553 on February 8, 2004, electing S status to be effective January 1, 2004.
Preopening Activity:
The corporation purchased a building on January 5, 2004, for $60,000 (including $10,000 land). It is being depreciated using 39-year general MACRS for tax purposes. The corporation purchased new office furniture and equipment on January 4, 2004, for $4,500. It is being depreciated using 7-year general MACRS for tax purposes. The owners want to claim the 50% additional first-year depreciation on the furniture and equipment.
Income:
Gross receipts: $117,585
Bank interest: $1,202
Expenses:
Compensation of officers $45,000 Employee Wages $12,000
FICA Taxes 4,361 FUTA and SUTA taxes 1,736
State income tax 1,400 Personal Property tax 418
Real Estate tax 835 Interest Expense 4,031
Repairs 673 Gas & oil 4,219
Depreciation 7,080 Supplies 1,315
Charitable contributions 300
Balance Sheet:
As of December 31, 2004, we had total assets of $96,418.
Cash $29,232
Investments 9,766
Fixed assets 54,500
Accumulated depreciation (7,080)
Land 10,000
As of December 31, 2004, we had total assets of $96,418.
As of December 31, 2004, we had total liabilities of $96,418.