Unadjusted

Book Balance
Debit Credit
Balance Sheet
Cash $ 270,700
Ending Inventory $ 16,000
Equipment $ 35,000
Land $ 10,000
Building $ 15,000
Improvements to building $ 55,000
Accumlated depreciation $ 9,000
Notes payable $ 78,000
Accounts payable $ 40,000
Taxes payable $ 8,000
Salaries payable $ 20,000
Capital stock $ 115,000
Retained earnings

Income Statement
Sales $ 400,000
Gain on sale of MND stock $ 18,000
Dividend from MND Corporation $ 2,000
Cost of goods sold $ 84,000
Legal expenses $ 6,000
Accounting expenses $ 4,000
Miscellaneous expenses $ 2,100
Premium on life insurance policy $ 800
Adverstising $ 8,600
Utilities $ 8,000
Payroll taxes $ 12,500
Salary expenses $ 120,000
Insurance $ 9,000
Repairs $ 6,500
Charitable contributions $ 17,600
Depreciation per books $ 9,000
Interest expense $ 200
Compensation of officers
Balances $ 690,000 $ 690,000
Net Income $ 131,700

My thinking is that expenses to incorporate and start up are deductible, hence the reason why I credi
I did 10% for the Charitable Contributions.
I adjusted the salary expenses because since she is an employee and owner of the S Corp then they w
 Adjusted
Adjustments Book Balance
Debit Credit Debit Credit

$ 270,700
$ 16,000
$ 35,000
$ 10,000
$ 15,000
$ 55,000
$ 9,000
$ 7,800 $ 70,200
$ 7,800 $ 47,800
$ 8,000
$ 20,000
$ 115,000

$ 400,000
$ 18,000
$ 2,000
$ 84,000
$ 6,000
$ 4,000
$ 2,100
$ 800
$ 8,600
$ 8,000
$ 12,500
$ 60,000 $ 60,000
$ 9,000
$ 6,500
$ 17,600
$ 9,000
$ 200
$ 60,000 $ 60,000
$ 67,800 $ 67,800 $ 690,000 $ 690,000
 $ 131,700

tible, hence the reason why I credited for legal, accoutning and 100 dollars of miscellaneous expenses.

d owner of the S Corp then they would need to distinguish Lisa's income as Compensation of officers.
 Tax Tax Trial
Adjustments Balances
Debit Credit Debit Credit

$ 9,100 $ 279,800
$ 800 $ 16,800
$ 35,000
$ 10,000
$ 15,000
$ 55,000
$ 9,000
$ 70,200
$ 47,800
$ 8,000
$ 20,000
$ 115,000

$ 400,000
$ 18,000 $ -
$ 2,000 $ -
$ 84,000
$ 688 $ 5,312
$ 4,000 $ -
$ 100 $ 2,000
$ 800 $ -
$ 8,600
$ 8,000
$ 12,500
$ 60,000
$ 9,000
$ 6,500
$ 17,600 $ -
$ 2,500 $ 11,500
$ 200
$ 800 $ 60,800
$ 33,200 $ 23,188 $ 680,012 $ 670,000
$ 131,588
 1120
Tax Return
Summary

$ 270,700
$ 16,000
$ 35,000
$ 10,000
$ 15,000
$ 55,000
$ (9,000)
$ (70,200)
$ (47,800)
$ (8,000)
$ (20,000)
$ (115,000)

$ (400,000)
$ (18,000)
$ (2,000)
$ 84,000
$ -
$ -
$ 2,000
$ -
$ 8,600
$ 8,000
$ 12,500
$ 60,000
$ 9,000
$ 6,500
$ 15,840
$ 11,500
$ 200
$ 60,000
$ (10,160)