Auto Dealerships - Audit Technique Guide - Uncle Fed's Tax*Board

Rents $ 500,000
Interest $ 50,000
Contributions $ 50,000
Depreciation $ 300,000
Advertising $ 1,000,000
Total Deductions $ 7,100,000
Distributable Income $ 3,000,000
Balance Sheet from Form 1120S
Beginning of End of
tax year
tax year
ASSETS
Cash $ 1,000,000 $ 3,000,000
Accounts Receivable $ 2,000,000 $ 1,000,000
Inventories $ 5,000,000 $ 7,000,000
Other Current Assets $ 4,000,000 $ 5,000,000
Loans to Stockholders $ 3,000,000 $ 4,000,000
Total Assets $ 15,000,000 $ 20,000,000
LIABILITIES
Accounts Payable $ 5,000,000 $ 7,000,000
Notes and Mortgages $ 1,000,000 $ 2,000,000
Loans from Stockholders $ 2,000,000 $ 3,000,000
Capital Account $ 7,000,000 $ 8,000,000
Total Liabilities and Capital $ 15,000,000 $ 20,000,000
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