Chat with us, powered by LiveChat Complete Celebrity Catering Service Inc.s (CCS) Federal Form 1120 and all related schedules for the tax period indicated in the financial statements provided. Be sure to attach schedules f | Wridemy

Complete Celebrity Catering Service Inc.s (CCS) Federal Form 1120 and all related schedules for the tax period indicated in the financial statements provided. Be sure to attach schedules f

Complete Celebrity Catering Service Inc.s (CCS) Federal Form 1120 and all related schedules for the tax period indicated in the financial statements provided. Be sure to attach schedules f

Complete Celebrity Catering Service Inc.’s (CCS) Federal Form 1120 and all
related schedules for the tax period indicated in the financial statements
provided. Be sure to attach schedules for any line item, which indicates one is
required on the 1120.

Due Date: Wednesday, September 21st at 11:59 pm

Purpose: The purpose of this is not merely to learn how to fill-in forms but to enable you to meet the following goals:

· Understand the corporate tax formula

· Identify common book-tax differences and distinguish between permanent & temporary differences.

· Calculate the current & deferred income tax expense or benefit components of a tax provision.

Task: In order to successfully complete this assignment you must:

· Complete Celebrity Catering Service Inc.’s (CCS) Form 1120 and all related schedules. Be sure to attach schedules for any line item, which indicates one is required on the 1120. This includes line items that may require you to create a schedule that identifies the various items that are included in a line on the return these usually indicate “attach schedule.” Other lines will indicate specifically which schedule must be included with the return.

· The returns must be in.pdf format. The student can use either:

· Forms schedules and instructions found at www.irs.gov

· Tax preparation software may be used to prepare your assignment, but submission must still be in .pdf format.

· Include a list of all the judgments, decisions and assumptions that you made in order to complete the return. This should be submitted along with your return in a separate document.

Required:

· Complete Celebrity Catering Service Inc.’s (CCS) Federal Form 1120 and all related schedules for the tax period indicated in the financial statements provided. Be sure to attach schedules for any line item, which indicates one is required on the 1120.

· If any information is missing, use reasonable assumptions to fill in the gaps and list those assumptions as an attachment.

· Also list on the attachment any tax positions that you took in the completion of the return, such as depreciation method, elections, etc.

· The forms schedules and instructions can be found at www.irs.gov and download the necessary forms.

Criteria for Success: In order to earn maximum credit for this assignment be sure to review the grading rubric.

Rubric: Prepare a corporate tax return.

Dimension/Task

Fair Quality (25 pt.)

Average Quality (40 pts.)

Excellent (50 pts.)

Content- Book to Tax Differences – 40%

Your return meets ANY of these criteria:

· Several key items requiring special tax treatment were not identified.

· M-1 reconciliation is completely incorrect.

· M-1 reconciliation does not agree to return

Your return meets ANY of these criteria:

· A key item requiring special tax treatment was not identified.

· Did not maximize allowable deductions.

· M-1 is correct but does not agree to return.

· M-1 agrees to return however the key items were not identified rendering it incorrect.

Your return includes ALL of the following criteria:

· Key items requiring special tax treatment were all identified.

· Taxable income is correct

· M-1 Reconciliation is correct

Content- Balance Sheet – 40%

Your return meets ANY of these criteria:

· Balance Sheet out of balance.

· Balance Sheet is incomplete.

· M-2 is incorrect

Your return meets ANY of these criteria:

· Balance Sheet items are misclassified on the schedule.

· Detail for accounts requiring attached schedules are missing or incomplete.

Your return includes ALL of the following criteria:

· Balance Sheet is correct.

· Accounts requiring details are provided.

· M-2 is correct

Completeness-20%

Your return meets ANY of these criteria:

· Many schedules or forms are missing

· Many schedules or forms are incomplete

Your return meets ANY of these criteria:

· Schedules or forms are missing

· Schedules or forms are incomplete

Your return includes ALL of the following criteria:

· Necessary schedules and forms are provided.

· Schedules and forms are complete.

Celebrity Catering Services, Inc.

Rachael Ray, Paula Deen and Gordon Ramsay each own one-third of the common stock of Celebrity Catering Services, Inc. (CCS). CCS was incorporated on February 2, 2009. It has only one class of stock outstanding and operates as a C corporation for tax purposes. CCS caters to all types of social events.

· CCS is located at 540 Waverly Way Burbank, CA 91501

· Its employer ID is 38-4743474

· CCS’s business activity is catering food services. Its business activity code is 722300.

· The shareholders also work as officers for the corporation as follows:

· Rachael is the chief executive officer and president, (SS# 231-54-8976).

· Paula is the executive VP and Chief operating officer (SS#798-56-3241).

· Gordon is the VP of Finance (SS# 879-21-4536).

· All officers devote 100% of their time to the business and all of the officers are US citizens.

· CCS uses the accrual method of accounting, and the year-end as listed on the financial statement.

· CCS made four equal quarterly estimated tax payments of $600 each as well as an additional $300 paid with the extension. Its tax liability last year was $10,000. If it has overpaid its federal tax liability, CCS would like to receive a refund.

· The donations for 2021 qualify and the company would like to elect the increased charitable contribution limitation.

· CCS paid a dividend of $50,000 to each of its three shareholders on December 1. CCS had ample earnings and profits (E&P) to absorb the distribution.

CCS Corporate Tax Return Problem

1 | Page

Income

 

 

Sales

 

$3,022,480

Sales returns and allowances

 

-13,000

Net sales

 

3,009,480

Cost of goods sold

 

1,124,500

[1]

Gross profit

 

1,884,980

Net loss on sale of investments and equipment

 

$11,000

Dividend income

 

28,000

[2]

Interest income

 

6,700

[3]

Total income

 

$1,930,680

Expenses

 

 

Salaries and wages

1,429,000

 

[4]

Bad Debt

35,000

 

Meals

9,000

 

[5]

Entertainment

2,000

 

Repairs and Maintenance

15,450

 

State Income Tax

22,500

 

Payroll Taxes

127,000

 

Charitable Contribution

15,000

 

Equipment Rent

37,000

 

Warehouse Rent

60,000

 

Interest

2,500

 

[6]

Advertising

2,500

Professional Services

21,000

 

Depreciation

14,350

[7]

Employee benefits Programs

37,000

 

Other Miscellaneous Expenses

24,700

 

[8]

Total expenses

 

1,854,000

Net income before taxes

 

$76,680

Federal income taxes

 

(14,486)

Net income after taxes

 

$62,194

Additional information footnoted included on the following page.

[1] CCS’S inventory-related purchases during the year were $302,000 and direct labor of $789,000. It values its inventory based on cost using FIFO inventory cost flow method. CCS must use the 263A method for valuing its inventory for tax purposes the beginning balance of 263A adjustment is $10,000 and the ending value is $5,000. The current year additional §263A costs are $94,000 of the officer’s salary.

[2] CCS’s dividend income came from Sinful Desserts, Inc. (SD) CCS owned 10,000 shares of stock in SD at the beginning of the year this represented 16% of SD’s outstanding stock.

[3] $1,100 was from a City of Irvine bond that was used to fund public activities (issued in 2008), $800 was from an Oceanview City bond used to fund public activities (issued in 2007), $ 700 was from a US Treasury Bond and the rest was from a money market account at Bank of America.

[4] The officers’ salaries included are: Rachael Ray $280,000; Paula Deen $ 255,000 and Gordon Ramsey $225,000.

[5] The meals were all at restaurants.

[6] The interest expense was from an ordinary and necessary deductible business loan.

[7] None of the depreciation will be claimed on 1125A. The MACRS depreciation has been computed as $ 15,500 for assets not purchased during the current fiscal year.

[8] Includes $4,200 for premiums paid on term life insurance policies for which CCS is the beneficiary. The policies cover Rachael, Paula and Gordon. Also included is $500 of speeding tickets and parking tickets for food delivery. The rest are other miscellaneous, ordinary and necessary expenses.

Assets

1/1/21

12/31/21

Cash

$726,150

$768,150

Trade and accounts receivables

525,000

399,

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