Form 1120 Practice Tax Return
Facts in 2016:
ABC Inc. 123 Oak Dr Houston TX 77002
EIN-74-111111
Date Incorporated 1/1/2000
Total Assets $5,000,000
ABC Inc.'s Net Income per books is $440,000
Gross Receipts $1,000,000
Cost of Goods Sold $400,000 (assume no beginning and ending inventory and purchases are $400,000)
ABC Inc. uses the lower of cost or market method for valuing inventory and also uses the FIFO method for determining the cost of goods sold. Cash method of accounting is used for all other expenses other than inventory.
Business Activity Code is 99999 and business activity is retail sales of clothing.
Compensation paid to sole shareholder, John Doe. SSN-222-22-2222 was $200,000
Salaries and wages paid to employees were $50,000
Office Rent paid for corporate headquarters was $10,000
ABC Inc. contributed a computer used in its business since 1/1/2008 with a basis of $20,000 and a fair market value of $60,000 to the Salvation Army to be used in their business office.
Television advertising to promote the company products were $40,000
ABC Inc. elected to carry over $1,250 of overpaid taxes from 2015 to 2016
ABC Inc. paid $20,000 each of 4 quarters for estimated tax payments in 2016
ABC Inc. owns 10% of Better Inc., a domestic corporation, and received dividends in the amount of $100,000 in 2016
ABC Inc. owns 40% of Best Inc., a domestic corporation, and received dividends in the amount of $100,000 in 2016
ABC Inc. is a calendar year taxpayer and not affiliated with any other entity.
John Doe has engaged you to prepare the 2016 Form 1120 (pages 1, 2, 3 and Page 5 (M-1 only) for the ABC Inc.
You will not be preparing Form 1125-A, Cost of Goods Sold; Form 1125-E, Compensation of Officers; or Form 1120 Schedule G, Information on Certain Persons Owning the Corporation's Voting Stock .
Disregard any estimated tax penalties.
Be sure to sign the return as the preparer. Do not put your SSN # on the Form 1120.