Estimated Federal Income tax payent during the year

Estimated Federal Income tax payent during the year

Individual  Rehabilitaion Services is a a not for profit organization that assists individuals returning to society following a substance abuse conviction.  IRS gas beeb greatly successful in its urban effort.  Thus more resources are needed.  Late last year Irs began a restaurant operation, The Golden kettle, which specializes in soups.  Las year’s operation was a break-even effort.  At the beginning of the yhear, The Golden Kettle relocated to a mall.  It has been clearnly established by the district director of the Internal Revenue Service tht income genrated by the Golden Kettle will be unrelated to business income.


Determine the mininum federal income tax liability and the taxed owed at the time of filing based on the following data:

Cash receipstL $1600,900 (Sales of $156,100 plus $4800 donated by IRS by Golden Kettle customers)


CASH Distribuitions

Marchandise and purchases $52,000

Wages and related payroll    $20,870

rent                                        $3,600

Property insurane                  2,850

equipment                               15000

loan payment                            1200

utilities                                       1400

food license                                   400

professional fees                           1900

repairs and maintenance               950

advertisement                               4000

taxes                                               10000

phone                                              480

supplies                                         1300

MISC                                               520

total                                                 $116,470


Other information

1.  IRS is an accrual basis callendar year taxpayer

2.  Inventory information   FIFO      LiFO

Beginning inventory          12,000   11,200

ending inventory               14000     12,1000

3.  Explanation of notes

a.  included employer’s share of FICA

b. rent is $250 /month,  A $350 security deposit was made and the final months rent was paoid in advance on a 18-month lease

c two assets  aree insured

Inventory $150 and tangible property $2700

$200 a month to Buckner Band on a $3000 loan used to purchase equipment in (d) .  Interst expense is $450

$ 200 paid in January 1 and July 1 to the city controller

Breakdown of this expense indicates

$200 for preparation of prior year taxes

$600  Payment for artichect plans

$1100 attorney  for claim that customer got sick from uncooked food

Department of health orderd $650 worth of changes, $300 in fines

$1600 in advertising, plus $2400 in yellow page ad

Estimated Federal income tax payment during the year