Dr. George Bruce Owns a Laboratory An S Corporation Tax Return Exercise Accountancy 321, Fall 2011 George Bruce is a small business owner who owns 100 percent of a cash basis, calendar year S corporation that operates a medical laboratory. The company’s gross receipts from services for 2010 were $165,000. The corporation also earned interest of $23. Business expenses were as follows: Salaries and wages (not for officers) $ 82,500 Employee benefits 7,073 Rent on premises 18,000 Office expenses including supplies, utilities, and custodial 6.890 First year depreciation for new laboratory equipment (Form 4562 is optional)—Book depreciation = $20,400 102,000 Distributions for the year (tax-free) 500 No compensation was paid to dr. Bruce during 2010. The balance sheet of the corporation per books (for Schedule K) follows: Cash $300,000 $ 248,060 Equipment 100,000 202,000 Accumulated depreciation-100,000-120,400 Capital stock $100,000
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