61.6k views
1 vote
Required:

• Complete Blue Catering Service Inc.’s (BCS) 2021 Form 1120, Schedule D, and
Schedule G (if applicable) using the information provided below.
• Form 4562 for depreciation is not required. Include the amount of tax depreciation given
in the problem on the appropriate line on the first page of Form 1120.
• Forms 1125-A and 1125-E are not required.
• If any information is missing, use reasonable assumptions to fill in the gaps.
• The forms, schedules, and instructions can be found at the IRS website (www.irs.gov).
The instructions can be helpful in completing the forms.
Facts:
Cara Siler, Janna Funk, and Valerie Cloward each own one-third of the common stock of Blue
Catering Services Inc. (BCS). BCS was incorporated on February 4, 2012. It has only one class
of stock outstanding and operates as a C corporation for tax purposes. BCS caters all types of
social events throughout southern California.
• BCS is located at 540 Waverly Way, San Diego, California 92101.
• BCS’s Employer Identification Number is 28-4743474.
• BCS’s business activity is catering food and services. Its business activity code is
722300.
• The shareholders also work as officers for the corporation as follows:
o Cara is the chief executive officer and president (Social Security number 231-54-
8975).
o Janna is the executive vice president and chief operating officer (Social Security
number 798-56-3242).
o Valerie is the vice president of finance (Social Security number 879-21-4538).
• All officers devote 100 percent of their time to the business and all officers are U.S.
citizens.
• BCS made payments that require it to file several Form 1099s for 2021. These forms will
all be filed prior to the tax return.
• BCS uses the accrual method of accounting and has a calendar year-end.
• BCS made four equal estimated tax payments of $8,750 each. Its tax liability last year
was $41,000. If it has overpaid its federal tax liability, BCS would like to receive a
refund. • BCS paid a dividend of $30,000 to its shareholders on November 1. BCS had ample
earnings and profits (E&P) to absorb the distribution.

User Simen S
by
8.2k points

1 Answer

4 votes

Completing Blue Catering Services Inc.’s (BCS) 2021 Form 1120, Schedule D, and Schedule G (if applicable) is a comprehensive and detailed task, requiring several steps. While it's not possible to complete and display official IRS forms directly, a step-by-step guidance can be provided, emphasizing key points to consider:

Form 1120: U.S. Corporation Income Tax Return

1. Basic Information:

- The corporation's name, address, EIN, and business activity code should be filled in.

- Information for officers Cara Siler, Janna Funk, and Valerie Cloward is necessary in the officer’s section.

2. Income:

- BCS’s income for the year, including revenue from catering services, should be reported.

3. Deductions:

- Deductions such as salaries, rent, taxes, interest, etc., should be included.

- The tax depreciation, as noted, must be included.

4. Tax, Refunds, and Payments:

- The corporation’s tax liability needs to be calculated.

- Estimated tax payments totaling $35,000 ($8,750 x 4) should be included.

- A preference for a refund should be indicated if there's an overpayment.

Schedule D: Capital Gains and Losses

1. Capital Transactions:

- This schedule is required if BCS had any capital asset transactions, like the sale of property or equipment.

- Details of any capital gains or losses should be filled in.

Schedule G (if applicable)

1. Schedule G is for information on certain entities, transactions, and shareholders:

- This schedule should be completed if it's applicable based on BCS’s transactions and ownership structure.

Dividends

- The dividend of $30,000 paid to shareholders must be recorded.

Additional Points

- All officers' compensation must be reported accurately.

- The instructions on the IRS website should be reviewed for specific lines and additional requirements.

- If information is missing, reasonable assumptions should be made (e.g., about income, expenses).

- All required forms, including Form 1099s as mentioned, must be filed.

Final Steps

- The entire return should be reviewed for accuracy and completeness.

- An authorized person (likely Cara as the CEO) should sign the form.

- The form should be filed with the IRS by the due date.

This process is complex, and consulting with a tax professional or using tax software is often advisable to ensure accuracy and compliance with tax laws. The IRS instructions for each form can provide further guidance.

User MrRed
by
8.0k points