ax Return Assignment #2
Preparation of tax returns and related schedules can be very helpful in terms of integrating and applying
tax concepts. To that end, please prepare the appropriate tax forms and schedules for the problem below.
You may use the software provided with your textbook or prepare the forms by hand. Instructions for all
forms and schedules may be obtained from the IRS website. A hard copy of your solution with
schedules and forms in proper attachment order (stapled or clipped) is to be submitted by November 5th.
Check figure: Taxable Income (line 30) = $427,770.
On November 17, 2005, Casie Lynn and Kyle Allen formed LaBorne, Inc. to sell sporting goods.
Pertinent information regarding LaBorne, Inc. is summarized as follows:
LaBorne Inc.’s business address is 2120 Rebecca Lane, Great Falls, Montana 59401; its
telephone number is (575) 541-1122; and its email address is laborne@laborne.com.
The employer identification number is 11-1111111, and the principal business activity code is
451110.
Kyle is president of the company, and Casie is vice president.
Kyle and Casie are full-time employees of LaBorne, Inc. Kyle’s Social Security number is 12345-6789, and Casie’s Social Security number is 987-65-4321.
LaBorne, Inc. is an accrual method, calendar year taxpayer. Inventories are determined using
FIFO and the lower of cost or market method. LaBorne, Inc. uses the straight-line method of
depreciation for book purposes and accelerated depreciation (MACRS) for tax purposes.
LaBorne, Inc.’s income statement for 2014 is shown on page 2.
LaBorne, Inc.’s balance sheet is as follows:
Cash
Accounts receivable
Inventories
Stock investment
State of Montana bonds
Certificates of Deposit
Prepaid federal tax
Buildings and other depreciable assets
Accumulated depreciation
Land
Other assets
Total assets
Accounts payable
Other current liabilities
Mortgages
Capital stock
Retained Earnings
Total liabilities and equity
January 1, 2014
1,200,000
2,062,500
2,750,000
1,125,000
375,000
400,000
0
1,805,000
(727,000)
812,500
140,000
9,943,000
2,284,000
175,000
1,625,000
2,500,000
3,359,000
9,943,000
1
