Dear Customer,1) Does the owner issued a W-2 wage to him/herself? If yes, how much is it?
No w2 for owner
2) How much is the gross receipt of the Form 1120?
3) Has the business borrowed any money from anyone, including line of credit?
no lines of credit
4) Is there any loan from and to the shareholder?
all the money contributed to investment is on the capital account, didn't do it as a loan from owner
5) Has the restaurant taken out any credit cards to pay for its expenses?
no lines of credit
6) Has the owner used his/her credit card for the business expenses?
no credit cards at all,
7) So far, does the book shows any debt such as payroll liabilities not paid?
I do have $5542 in payroll liabilities which I don't understand why, we paid all payroll taxes quarterly
. I am reviewing payments to see where is the error.
8) I have a question, for a corporation, the capital contribution is relatively large. Usually, during incorporation, the owner probably puts in like 1,000 cash as capital and everything else as loan to the company. I am not saying this way is correct or not. It is just a common way for capital contribution. Why is his cash contribution to the capital account is so large? Did he have an initial stock and later, additional capital contribution?
When I meant cash it doesn't mean necessarily that all the expenses where paid in cash, most of them where from his personal
bank account. but all of them where part of the initial investment for the restaurant, which I didn't categorized it as a loan from the owner . I just did it as a capital stock thinking that eventually all that money invested has to be paid back to the owner. Lack of knowledge.9) Are we talking about 2015 or 2016? If you have a K-1 already, I am thinking that it is a 2015 K-1.
this K1 is for 2014, 2015 has a loss as well , business was closed at the beginning of 2016 no more contributions made on 2015, no distributions ether.10) Has he consulted with you or an attorney on whether the entire 135,092 he wants it to be capital contribution.
None of the above, I am the one who recorded all this expenses as a capital contribution.Regards,Yasmin