Acct 553 | Calculation of Form

Running head: ACCT 553
Acct 553
Name of the Student:
Name of the University:
Authors Note:

ACCT 553
1
Contents
Calculation of Form 1120:...............................................................................................................2
Calculation of Schedule D:..............................................................................................................4
Calculation of Schedule 1125-A:.....................................................................................................6
Calculation of Schedule 1125-E:.....................................................................................................6
Calculation of Form 4797:...............................................................................................................7
Discussion and analysis:..................................................................................................................8
References:....................................................................................................................................11
Appendix:......................................................................................................................................12

ACCT 553
2
Calculation of Form 1120:
Computation of taxable income of business in form 1120
Calculation of taxable income of Bizrate Electronics
Particulars Amount ($) Amount ($)
Net income as per income statement of the company 381,400.
00
Add: Disallowed expenditures and taxable income not included
salaries paid to Jon Jones and Billy Burt not allowed as deduction 250,000.00
Depreciation 75,400.00
Interest to the extent related to investment in stock 2,500.00
Start-up expenses up to $5000 is allowed as deduction (6000 -5000) 1,000.00
Meals and entertainment expenses is not allowed as deduction 80,000.00
Federal income tax deposit is not an expenditure 250,000.00
Fines and penalties are not allowed as deduction 1,000.00
Insurance premium on the family of both Jon and Billy not allowed as
business expenditure
8,200.00
Taxable gain on sale of delivery truck (Note III) 10,950.00
679,050.

ACCT 553
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00
1,060,450.0
0
Less: Allowable expenditures not deducted and income included but not taxable as business income
Depreciation for tax purposes 112,700.00
Gain on sale of stock is not business income 4,000.00
Gain on sale of truck included in income tax 8,600.00
Interest on tax exempt bond is exempted 1,100.00
Dividends from US Corporation is not taxable 5,600.00
132,000.
00
Taxable income of business 928,450.
00
Calculation of tax liability on taxable income of business:
Corporations in US are subjected to a flat tax rate of 21% and accordingly the tax liability on the
amount of taxable income of $928,450 is calculated below.
Particulars Amount ($)
Taxable income 928,450.00