S O LU T I O N TO C O R P O R AT I O N P R AC T I C E S E T
No More Ice, Inc.

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No More Ice, Inc. E. I. No. 98-7654321 A Schedule Attached to and Made Part of 2012 Form 1120—U.S. Corporation Income Tax Return List of Attached Schedules

Schedule O—Consent Plan and Apportionment Schedule Form 1125-A—Cost of Goods Sold Forms 8949—Sales and Other Dispositions of Capital Assets Form 4626—Alternative Minimum Tax—Corporations Schedule D—Capital Gains and Losses Schedule G (Form 1120)—Information on Certain Persons Owning the Corporation’s Voting Stock Form 1125-E—Compensation of Officers Attachment—Supporting Details

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INFORMATION FOR INSTRUCTORS CORPORATION PRACTICE SET (2013-2014 EDITION) No More Ice, Inc.

Following are details on some of the calculations in the solution. Observations are made on areas which the students may find more difficult. You can reduce the difficulty of the practice set if you so choose by providing your students “clues” (or even the solutions) in some or all of these areas. Paragraph references are to the facts for the practice set. 1. Computation of Cost of Goods Sold (Form 1125-A). Amounts for beginning and ending inventories and for cost of goods sold are provided. Students must “back into” the cost of purchases; e.g., Cost of Goods Sold ........................................................................... Inventory Adjustment Beginning Inventory ........................................ $500,247 Ending Inventory ............................................. 605,599 Cost of Purchases .............................................................................. $5,143,732 105,352 $5,249,084 Easy

2. Para. 5. Bad Debts (Form 1120, p. 1, ln. 15). The reserve method is not allowable for Federal income tax