CORPORATE TAX RETURN
Case Study (5 hours):
• Complete Alvin’s Music Inc.’s (AMI) 2013 Form 1120, Form 4562, Form 4797 and Form 4626.
• The trial balance and tax return work papers can be found in file: Module 14_Workpaper template.xlsx.
• Remember to review the trial balance for adjustments that may need to be made.
• If any information is missing, use reasonable assumptions to fill in the gaps.
• AMI is Alvin’s Music, Inc. (AMI) was formed in 2006 by Alvin Jones and Theona Smith. Alvin and Theona officially incorporated their store on June 12, 2006. AMI sells (retail) all kinds of music-related products including musical instruments, sheet music, CDs, and DVDs.
• AMI is located at 355 Music Way, East Palo Alto, CA 94303.
• AMI’s Employer Identification Number is 29-5748859.
• AMI’s business activity is retail sales of music-related products. Its business activity code is 451140.
• Officers of the corporation are as follows:
o Alvin is the chief executive officer and president (Social Security number 123-45-6789) and owns 60% of the common stock outstanding.
o Theona is the executive vice president (Social Security number 978-65-4321) and owns 40% of the common stock outstanding.
o Gwen Givens is the vice president over operations (Social Security number 789-12-3456).
o Carlson Bannister is the secretary (Social Security number 321-54-6789).
o All officers devote 100% of their time to the business and all officers are U.S. citizens.
o Neither Gwen nor Carlson owns any stock in AMI.
• AMI uses the accrual method of accounting and has a calendar year-end.
• AMI made four equal estimated tax payments of $75,000 each. If it has overpaid its federal tax liability, AMI would like to receive a refund.
• AMI paid a dividend of $80,000 to its shareholders on December 1. AMI had ample earnings and profits (E&P) to absorb the distribution.
• AMI’s audited income statement for 2013 shows net income after taxes of...