In this project, you will provide tax guidance and assistance from a profitable start up corporation. You will help this corporation on how to incorporate, obtaining a taxpayer identification number and a method of accounting for tax records.
The corporation will have the following characteristics:
- Retail sales in excess of $50 million
- Dividend income
- Charitable contributions
- Dividends paid to stockholders
- Related party transactions
Requirements
Each assignment has individual requirements noted on the assignment page. Your project must include each section noted in the time line above: a written paper providing the tax guidance, and tax forms and any supporting calculations. Your final paper should follow APA Guidelines for in-text citations and references pages.
PART I: Incorporation
Your client, a sports equipment and apparel retail chain, wishes to incorporate under the name JKEB Enterprises, Inc. The company is located within the state of Florida.
For this week, focus on preparing the following portions of the paper. This portion should explain the following in 3-4 pages:
- How to incorporate
o Identify areas of the articles of incorporation to provide the client with guidance on, also provide the steps for your client to incorporate.
- Obtain a taxpayer identification number
o Provide the steps and websites the clients will need to use.
- Method of accounting for tax records
o Educate the client on cash versus accrual accounting from a tax basis. Highlight the differences for them and provide a recommendation.
Save your assignment as a Microsoft Word document
PART II:Financial Information for Tax Return
Use the following information for JKEB Corporation to complete pages 1 through 3 of the 2011 Form 1120. The final return is due in week five.
Address: 1994 Lincoln St, Township, FL 34691
Employer Identification Number: 98- 325465
Date Incorporated: 01-01-11
Accounting Method: Accrual
Use the following link to determine the principal business activity code:
JKEB Corporation's activities are focused more on sporting goods than apparel. They are not a subsidiary of another corporation and no entity owns more than 20% of JKEB Inc.
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Total Assets
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$2,250,000
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Total Receipts/Sales
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$3,750,000
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Returns and Allowances
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$187,500
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Cost of Goods Sold
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$950,000
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Dividends from less than 20% owned investees
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$300,000
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Dividends from 20% or more owned investees
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$15,000
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Interest
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$5,000
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Income from store vending machines
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$1,500
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Salaries and Wages
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$150,000
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Bad Debts
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$12,500
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Rent
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$40,000
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Charitable contributions during 2011
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$2,000
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Advertising
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$5,000
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Repairs
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$2,750
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Tax Deposits during 2011
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$10,000
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PART III: Final Project
By now you should have completed your corporation tax forms. Submit the completed form, along with your paper detailing your advice on how to incorporate. Remember, your final paper should follow APA Guidelines for in-text citations and references pages.