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piron 7500 2n1 00: Manatee Corporation Balance sheet as of December 31, 2019 and 2020 2019 $ 63,530 86,595 (11,820) 173,823 85,000 348,000 572,286 (121,188) 44,926 $1.241.152 $ 248,323 1,500 21,000 435,170 28,000 50,000 98,000 359,159 $1.241.152 Assets Cash Accounts receivable Less: allowance for bad debts Merchandise inventory Investment assets Land Buildings and equipment Less: accumulated depreciation Other assets Total Assets Liabilities and Equity Accounts payable Current portion of long-term debt Other current liabilities (unearned rent) Long-term payables Common stock Preferred stock Additional paid-in capital Retained earnings (unappropriated) Total Liabilities and Equity 2020 $ 87,094 137,800 (18,820) 140,450 81,000 430,000 842,286 (220,188) 45.420 $1.525.042 $ 284,363 11,500 28,500 376,170 28,000 50,000 98,000 648 509 $1.525.042
on 7500 21 00: Manatee Corporation Statement of Income for the year ended December 31, 2020 Sales revenue Dividend income Rental income Municipal bond interest income Gain on land exchange Loss on sale of investments Cost of goods sold Depreciation expense Interest expense Officers salaries Salaries and wages paid to sales and administrative personnel Employee benefits Bad debt expense Property taxes Charitable contributions Premiums on key-man life insurance Business meals and entertainment Lobbying costs Other administrative costs Repairs and maintenance Income before taxes Income tax expense (federal and state) Net income $1,923,000 6,500 47,650 4,000 $2,000 (14,000) (761,000) (99,000) (6,200) (150,500) (182,000) (46,000) (33,000) (19,600) (4,000) (8,700) (17,400) (11,000) (37,900) (21.500) 621,350 (182.000) $439 350 lack 7 1 T 0 CE N S 8 5
ASSE CEB $400,000 and a book and tax basis of $348,000 to an unrelated corporation in exchange for other investment and with a FMV of $430,000. For tax purposes, this exchange qualities as a ko-kind exchange under Sec 1001 6. Manatee's income statement reflects total loss on investment assets of $14,000 Detailed information for the assets producing this loss is as follows Stock Date Acquired Cost Date Sold Sales 7/2/10 150 shares Clay Corp 100 shares Gold inc $5,000 4/1/20 12,000 Proceeds $2.500 500 4/2/16 11/6/20 Manatee has rented out unused space in its office building to several tenants. Rental income from this activity is reported on its income statement. Several tenants pay rent in advance-see items 8 and 9 below related to the uneamed rental income 8 Manatee's beginning balance sheet reflects a liability for uneamed rental income totaling $21,000. This liability reflects cash collected from tenants late in 2019, related to rental periods in 2020. This income was reported on Manatee's 2019 tax return. When the rental period occurs in 2020, Manatee recorded book income for this amount Manatee's ending balance sheet reflects a liability for unearned rental income totaling $28,500 This liability reflects cash collected from tenants late in 2020 for which the rental period occurs in 2021 10 Manatee's income statement reflects book income tax expense of $182,000 of this amount, $135,000 is book federal income tax expense, and the remainder is state income tax expense 11. Manatee's income statement reports business meals and entertainment costs of $17,400. Of this amount, $8,000 is entertainment and the remainder relates to business meals 12 Manatee paid federal estimated tax payments totaling $175,000 13 Included in other administrative costs on Manatee's income statement are $2,650 in fines paid to the local government for parking violations 14. Manatee paid $150,000 of dividends to its shareholders during 2020 The corporation has earnings and profits greater than the current dividend distributions 15 Manatee's inventory is purchased for resale, and valued at cost. The rules of Sec. 263A do not apply to Manatee in valuing its inventory 16. Manatee's employer ID number is 98-7654321 = Tham lek 7 1 0 CE 7 8 S 2 F . 9 in 6 3 NVIDIA
aid D b M 1 <d A 2 # • 2 7500 CIT W S 104 . 3 X E D 1 C R F DUE 6/20/2022 Tax Return Project Accounting 5413-Summer 2022 Requirements T Read and analyze the case facts. This is an individual effort, NOT a group effort Complete the following forms for the 2020 tax year 1120 (all six pages 1125-A Schedule D form 1120), 4562, 0824. You need not complete Schedule M-3, or any other forms not specifically listed above. This is an individual effort, NOT a group effort Forms and their instructions can be downloaded from the IRS website at https://www.is.govforms instructions IMPORTANT: Please ensure that you get 2929 forms CRITICAL: Do NOT complete the forms in your browser. Download them, save to your computer, and then open using Adobe Acrobat. If you try to complete in your browser, they will not save property and you could lose all of your work. 3 You must upload your completed forms to Blackboard prior to the beginning of class on December 6, 2021. You should also bring to class a copy of your completed forms for reference. During class, you will work in small groups to complete a set of tax forms for Manatee Corporation. Your group will turn in the group forms at the end of class. You will be graded on your group's efforts in addition to your individual grade Case Facts Manatee Corporation prepared the attached 2020 balance sheet and income statement in accordance with generally accepted accounting principles. In addition, the following information is available that might impact the calculation of 2020 taxable income During June of 2020, Manatee acquired new equipment with a total cost of $270.000 This equipment is considered seven-year property under MACRS and is not listed property Tax depreciation on the remainder of Manatee's fixed assets (those acquired before 2020), computed under MACRS, totals $144,000 2 When Manatee was formed five years ago, it incurred $37,000 of organization costs. For book purposes, these costs were expensed five years ago when incurred. For tax purposes, Manatee deducted $5,000 of the costs in the year of formation. The remainder is being amortized for tax purposes over 180 months 3 Dividend income on the income statement is from investments in several stocks Manatee owns less than 1% of the outstanding stock of any investee corpo Book bad debt expense was computed using the allowance method. Actual write-offs of uncollectible accounts during 2020 totaled $20,000 5. Manatee's income statement reflects a $52,000 gain on an exchange of land. In November 2020, Manatee transferred $30,000 cash and investment land with a FMV of amg Proble Sign Here Pulid Preparer Use Only