question archive Create Alvin's Music Inc
Subject:AccountingPrice: Bought3
Create Alvin's Music Inc.'s (AMI) 2020 Form 1120, Schedule D, and Schedule G (if
applicable) using the information provided below.
-Neither Form 4562 for depreciation nor Form 4797 for the sale of the equipment is
required. Include the amount of tax depreciation and the tax gain on the equipment sale
given in the problem (or determined from the information given in the problem) on the
appropriate lines on the first page of Form 1120.
-Forms 1125-A and 1125-E are not required.
-If any information is missing, use reasonable assumptions to fill in the gaps.
-The forms, schedules, and instructions can be found on the IRS website
Facts:
Alvin's Music Inc. (AMI) was formed in 2010 by Alvin Jones and Theona Smith. Alvin and
Theona officially incorporated their store on June 12, 2011. AMI sells (retail) all kinds of music-
related products including musical instruments, sheet music, CDs, and DVDs. Alvin owns 60
percent of the outstanding common stock of AMI and Theona owns the remaining 40 percent.