Slattery's, Inc.

Tax Trial Balance

December 31, 2012

Unadjusted Adjusted Tax Tax Trial 1120s Separately Ordinary

Book Balance Adjustments Book Balance Adjustments Balances Tax Return Stated Business
Balance Sheet DR CR DR CR DR CR DR CR DR CR Summary Items Income/Loss
Cash 270,700 270,700 270,700 270,700
Ending Inventory 16,000 16,000 16,000 16,000
Equipment 35,000 35,000 35,000 35,000
Land 10,000 10,000 10,000 10,000
Building 15,000 15,000 15,000 15,000
Improvements to Building 55,000 55,000 55,000 55,000
Accumlated Depreciation 9,000 - 9,000 9,000 (9,000)
Accounts Payable 40,000 7,800 - 47,800 47,800 (47,800)
Notes Payable 78,000 7,800 - 70,200 70,200 (70,200)
Taxes Payable 8,000 - 8,000 8,000 (8,000)
Salaries Payable 20,000 20,000 20,000 (20,000)
Capital Stock 115,000 115,000 115,000 (115,000)

Income Statement
Sales 400,000 400,000 400,000 400,000 400,000
Gain on sale of MND Stock 18,000 - 18,000 12,000 - 30,000 30,000 30,000 -
Dividend from MND Corporation 2,000 2,000 2,000 2,000 2,000 -
Cost of goods sold 84,000 84,000 - 84,000 - (84,000) (84,000)
Legal expenses 6,000 6,000 - - - -
Accounting expenses 4,000 4,000 - - - -
Miscellaneous expenses 2,100 100 2,000 2,000 (2,000) (2,000)
Organizational expenses 10,100 10,100 4,855 5,245 (5,245) (5,245)
Premium on life insurance policy 800 800 - - - - -
Advertising 8,600 8,600 8,600 (8,600) (8,600)
Utilities 8,000 8,000 8,000 (8,000) (8,000)
Payroll taxes 12,500 12,500 12,500 (12,500) (12,500)
Salary expenses 120,000 60,000 60,000 60,000 (60,000) (60,000)
Officers compensation - 60,800 60,800 60,800 (60,800) (60,800)
Insurance 9,000 9,000 9,000 (9,000) (9,000)
Repairs 6,500 6,500 6,500 (6,500) (6,500)
Charitable Contributions 17,600 17,600 17,600 (17,600) (17,600) -
Depreciation 9,000 9,000 2,500 11,500 (11,500) (11,500)
Interest expense 200 200 200 (200) (200)
Balances 690,000 690,000 78,700 78,700 690,000 690,000 2,500 16,855 687,645 702,000

Net Income 131,700 131,700 Taxable Income 146,055 14,400 131,655

any items with special treatment at the individual level are separately stated items

1 https://www.cpa2biz.com/Content/media/PRODUCER_CONTENT/Newsletters/Articles_2008/Wealth/Guidance.jsp
Adjusting Journal Entries DR CR
Depreciation Expense 9,000
Accumulated Depreciation 9,000
Notes Payable 7,800 (10% of notes payable are due each year for the next 10 years)
Accounts Payable 7,800

Organizational expenses 10,100

Legal expenses 6,000 Legal Setup Fees Paid in Feb
Accounting expenses 4,000 Accounting System Setup Paid in May
Miscellaneous expenses 100 State of Oregon (?) Setup Fee Paid in Feb

Officers compensation 60,800

Premium on life insurance policy 800
Salary expenses 60,000

Tax Adjustment Computations

Cash 38,000
Adjusted Basis in MND Stock 8,000
Gain on Sale of MND Stock 30,000
Organizational Expenditures
Legal expenses 6,000
Miscellaneous expenses 100
Total February expenses 6,100
Less: Expensable organizational cost (5,000)
Amortizable February expenses 1,100
Amortizable period 180 months
Monthly deductible amount 6.11 per month
Periods in 2012 11
Deductible Amount in 2012 67.22

Accounting expenses 4,000

Amortizable May expenses 4,000
Amortizable period 180 months
Monthly deductible amount 22.22 per month
Periods in 2012 8
Deductible Amount in 2012 177.78

One-time deduction 5,000.00

Amortized February expenses 67.22
Amortized May expenses 177.78
Total Organizal expense deduction 5,245.00
Sales 400,000
COGS 84,000
Total Income 316,000

Legal Expenses 6,000

Accounting expenses 4,000
Miscellaneous expenses 2,100
Premium on life insurance policy 800
Advertising 8,600
Utilities 8,000
Payroll taxes 12,500
Salary expenses 120,000
Insurance 9,000
Repairs 6,500
Depreciation per books 9,000
Interest Expense 200
Deductions 186,700

Ordinary Business Income 129,300 top of schedule k and line 21 on 1120s

 S Corporation
Corporation Separately Stated Item Ordinary Bus Income
Gross Income 100,000
CGS (50,000)
Net Gross Income 50,000 50,000
Dividends 10,000 10,000
Interest 5,000 5,000
Gross Income 65,000
Compensation (10,000) (10,000)
Contributions (10,000) (10,000)
Corporate NI 45,000 5,000 40,000
Corp Tax (10%) 4,500