Identify at least three errors or omissions in Zeus, Inc.’s Form 1120: U.S., Court Proceedings, or FASB Statements. [PDF] Explain the criteria that require the use of M-3 and describe how this is more beneficial to users of financial statements.
Explain at least two IRS-approved methods available to Zeus Inc. Estimate tax payments, explain and justify preferred methods.
Explain the relationship between an entity’s tax year and its financial reporting year and explain at least two complications. Provides how to mitigate two complications that may arise in preparing Zeus Inc.’s financial statements for income tax preparation.
Financial Statement Analysis of Zeus Inc.
Unlike other types of companies, there are many formalities that companies must follow to avoid penalties. These start with the detailed company registration process, all the way to the specific company and tax information required by the IRS. This document analyzes Zeus Inc.’s corporate income tax return, which was prepared by the company’s junior accountant. It pointed out his mistakes and looked into some tax issues that the accountant wasn’t sure about.
Omissions include income, gains, losses, deductions, and credits related to Zeus Inc. transactions that were not included on Form 1120 completions. Dividends paid to Zeus are classified as part of the company’s profits. Relatedly, Fun Fair of Russia paid $14,000 in dividends to Zeus Inc., but these dividends were not entered on the table as capital or other gains. To obtain the tax-exempt securities, Zeus Inc. paid attorneys $10,000, which was considered part of ordinary fees. The new junior accountant did not include this fee on the form. Zeus Inc. shall determine the taxable income of the company for the specified period. To this end, the IRS requires the organization to evaluate its records and report income and expenses (IRS, 2021). This suggests that all expenses are part of the records that need to be quantified in order to receive the full allowance. Deductions are part of the form and one of the most notable deductions that should be included is the $400,000 in dividends…
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