1120 Problem. Ben Higgins (SSN: 315-78-5542) is the sol

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1120 ProblemBen Higgins (SSN: 315-78-5542) is the sole shareholder of Southwest Distributing Co., Inc. SouthwestDistributing sells traps and other items designed to lure and catch wild birds in the southwest. As theCEO (employee) of SWDC, Mr. Higgins receives a salary of $100,000. He also has 2 other employees.Southwest Distributing Co’s financial information for 2015 and selected from 2014 is as follows:20142015Cash40,00045,000Inventory30,00025,000Accounts receivable120,000128,710Allowance for doubtful accounts(12,000)(11,000)Tax refund receivable06,290Investment in stock50,00050,000Tax exempt bonds100,000100,000U.S. government bonds100,000100,000Equipment and buildings300,000315,000Accumulated depreciation(65,000)(95,000)Land50,00050,000Patent75,00075,000Accumulated amortization(75,000)(75,000)Total assets713,000714,000Accounts payable150,000111,487Accrued expenses35,00028,000Notes payable in 2017100,000100,000Capital stock10,00010,000Additional paid in capital90,00090,000Retained earnings328,000374,513Total liabilities & stockholder's equity713,000714,000
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