Ccorp-problem4.pdf

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Chapter E: Practice Set Assignments—Comprehensive Tax Return Problems Problem 4—C Corporation (Form 1120)
Book Title: South-Western Federal Taxation: Comprehensive Volume, 2021 Edition
Printed By: Ziyin Chen ([email protected])
© 2021 Cengage Learning, Inc., Cengage Learning, Inc.

Problem 4—C Corporation (Form 1120)
On February 12, 2005, Nancy Trout and Delores Lake
formed Kingfisher Corporation to sell fishing tackle.
Pertinent information regarding Kingfisher is
summarized as follows:

Kingfisher’s business address is 1717 Main Street, Ely, MN 55731; its telephone
number is (218) 555-2211; and its e-mail address is [email protected].

The employer identification number is 11-1111113, and the principal business activity
code is 451110.

Nancy owns 50% of the common stock and is president of the company, and Delores
owns 50% of the common stock and is vice president of the company. No other class
of stock is authorized.

Both Nancy and Delores are full-time employees of Kingfisher. Nancy’s Social
Security number is 123-45-6788, and Delores’s Social Security number is 123-45-
6787.

Kingfisher is an accrual method, calendar year taxpayer. Inventories are determined
using FIFO and the lower of cost or market method. Kingfisher uses the straight-line
method of deprecation for book purposes and accelerated depreciation (MACRS) for
tax purposes.

During 2019, the corporation distributed cash dividends of $80,000.

Kingfisher’s financial statements for 2019 are shown below and on the next page.

mailto:[email protected]

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* You are not provided enough detailed information to complete a Form 4562
(depreciation). If you solve this problem using Intuit ProConnect, enter the amount
of deprecation on line 20 of Form 1120.

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During 2019, Kingfisher made estimated tax payments of $27,000 each quarter to the IRS.
Prepare a Form 1120 for Kingfisher for tax year 2019. Suggested software: ProConnect Tax
Online.

Chapter E: Practice Set Assignments—Comprehensive Tax Return Problems Problem 4—C Corporation (Form 1120)
Book Title: South-Western Federal Taxation: Comprehensive Volume, 2021 Edition
Printed By: Ziyin Chen ([email protected])
© 2021 Cengage Learning, Inc., Cengage Learning, Inc.

© 2021 Cengage Learning Inc. All rights reserved. No part of this work may by reproduced or used in any form or by any means –
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