Project 1—Data and instructions (Group C)

Assume that you have set up an Emirati corporation that does business in many countries,
including in the USA. Your company is set up as a large US C-corporation and your company
is required to submit Form 1120 to report corporate income. and Schedule C to report
dividend income from other companies that your corporation owns.

Your company is in the manufacturing. The cost of goods sold is calculated by adding the
beginning of period inventory to the inventory purchases and subtracting the end of period
inventory. Fill in Form 1125-A to calculate cost of goods sold. Any other items in Form 1125-
A can be left blank.

For dividends, your company only has one source of dividend income—from a domestic
corporation in which your company has a 10% ownership share. You can calculate the
amount of dividend received deduction on Schedule C.

You must fill out both Schedule C and Form 1125-A, before
completing Form 1120.

For form 1120 and all other forms, if nothing is listed, assume the number is zero. Hence,
you do not have to fill out Schedules K, L, M-1, M-2 or any other supporting schedules,
forms, and documents.

For the name of your corporation, list your name and the names of the classmates in your
group, if you are filing one return for the group. You have the option of one or two people
per group. The fillable tax forms are on Blackboard.

Specific numbers for your group are on the next page. All numbers are in US dollars.
Numbers are not listed in any specific order except they are identified as either income or
costs.

Fill out Schedule C, Form 1125-A and Form 1120 (pages 1, 2, and 3).
Determine either the amount of refund you receive or what you owe the US government
on April 15, 2019.
2018 data for your corporation (Data set C)

Date incorporated January 1, 2007

Employer identification number 2007-57445
Beginning of period inventory $3,200,000
Purchases of inventory $4,500,000
End of period inventory $2,000,000

Gross sales $12,500,000

Returns and allowances $200,000

Other Income:
Royalties $130,000
Dividends received $240,000

Costs:
Repairs $150,000
Advertising $700,000
Bad debts $35,000
Employee benefits $800,000
Salary and wages to company employees $3,200,000
Compensation of corporate officers $1,300,000
Interest paid on bonds $88,365
Charitable contributions $10,000
Rent paid $265,800

Estimated total tax paid in 4 installments of $17,250 to US government during 2018, so

taxes paid = $69,000