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linda_us, Master's Degree
Category: Single Problem
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Experience:  A tutor for Business, Finance, Accounts and other related topics.
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Permtemp Corporation formed in 2013 and, year, reported

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Permtemp Corporation formed in 2013 and, for that year, reported the following book income statement and balance sheet, excluding the federal income tax expense, deferred tax assets, and deferred tax liabilities:Sales $20,000,000Cost of goods sold) (15,000,000)Gross profit $ 5,000,000Dividend income 50,000Tax-exempt interest income 15,000Total income $ 5,065,000Expenses:Depreciation $ 800,000Bad debts 400,000Charitable contributions 100,000Interest 475,000Meals and entertainment 45,000Other 3,855,000Total expenses) 5,675,000Net loss before federal income taxes $ (610,000)Cash $ 500,000Accounts receivable $ 2,000,000Allowance for doubtful accounts) (250,000) 1,750,000Inventory 4,000,000Fixed assets $10,000,000Accumulated depreciation) (800,000) 9,200,000Investment in corporate stock 1,000,000Investment in tax-exempt bonds 50,000Total assets $16,500,000Accounts payable $2,610,000Long-term debt 8,500,000Common stock 6,000,000Retained earnings) (610,000)Total liabilities and equity $16,500,000Additional information for 2013:The investment in corporate stock is comprised of less-than-20%-owned corporations.Depreciation for tax purposes is $1.4 million under MACRS.Bad debt expense for tax purposes is $150,000 under the direct writeoff method.Limitations to charitable contribution deductions and meals and entertainment expenses must be tested and applied if necessary.Qualified production activities income is zero.For 2014, Permtemp reported the following book income statement and balance sheet, excluding the federal income tax expense, deferred tax assets, and deferred tax liabilities:Sales $33,000,000Cost of goods sold) (22,000,000)Gross profit $11,000,000Dividend income 55,000Tax-exempt interest income 15,000Total income $11,070,000Expenses:Depreciation $ 800,000Bad debts 625,000Charitable contributions 40,000Interest 455,000Meals and entertainment 60,000Other 4,675,000Total expenses) (6,655,000)Net income before federal income taxes $ 4,415,000Cash $ 2,125,000Accounts receivable $ 3,300,000Allowance for doubtful accounts (450,000) 2,850,000Inventory 6,000,000Fixed assets $10,000,000Accumulated depreciation (1,600,000) 8,400,000Investment in corporate stock 1,000,000Investment in tax-exempt bonds 50,000Total assets $20,425,000Accounts payable $ 2,120,000Long-term debt 8,500,000Common stock 6,000,000Retained earnings 3,805,000$20,425,000Additional information for 2014:Depreciation for tax purposes is $2.45 million under MACRS.Bad debt expense for tax purposes is $425,000 under the direct writeoff method.Qualified production activities income is $3 million.Required for 2014:a. Prepare page 1 of the 2014 Form 1120, computing the corporations taxable income and tax liability.b. Determine the corporations deferred tax asset and deferred tax liability situation, and then complete the income statement and balance sheet to reflect proper GAAP accounting ASC 740. Use the balance sheet information to prepare Schedule L of the 2014 Form 1120.c. Prepare the 2014 Schedule M-3 for Form 1120.d. Prepare a schedule that reconciles the corporations effective tax rate to the statutory 34% tax rate.Sales 20,000,000Cost of goods sold) (15,000,000)Gross profit 5,000,000Dividend income 50,000Tax-exempt interest income 0Total income 5,050,000Expenses:Depreciation (1,400,000)Bad debts (150,000)Charitable contributions 0Interest (475,000)Meals and entertainment 22,500Other (3,855,000)Total expenses) (5,857,500)Net loss before federal income taxes (807,500)And also I have everything prepared for 2013.All I need is 2014. I have prepared
JA: Thanks. Can you give me any more details about your issue?
Customer: I do not know how to do 2014 as it is confusing and difficult
JA: OK got it. Last thing — Business Tutors generally expect a deposit of about $18 to help with your type of question (you only pay if satisfied). Now I'm going to take you to a page to place a secure deposit with JustAnswer. Don't worry, this chat is saved. After that, we will finish helping you.
Submitted: 7 months ago.
Category: Single Problem
Expert:  Manal Elkhoshkhany replied 7 months ago.
Hello,Thank you for requesting me to answer your post, you mean you need the calculations for 2014 or the tax forms as well? When you respond, please advise your deadline

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