Q: Where did the $623,191 come from?
A: The $623,191 is taxable business income excluding the impact of the Section 179 Deduction. It is the sum of ordinary business income of $635,414 reported at Line 21 on Schedule 1120S and again at Line 1 on Schedule K, plus $207 of interest income at Line 4, less $12,430 of charitable deductions at Line 12C.
Q: I wish you gave a minute before closing the poll or at least give a ten second notice before closing the polls.
A: A very good suggestions. We will make a point in the future of giving a ten to fifteen second notice before closing a poll.
Q: Where did you get the $176,563 in depreciation expense? I have $173,225, which is the change in accumulated depreciation from Schedule L.
A: Depreciation expense of $176,563 is the sum of depreciation expense of $111,303 reported on Schedule 1102S via Form 1125-A plus $65,260 of depreciation expense reported at Line 3a on Schedule M-1, which is the amount of depreciation expense excluded from the business income tax returns that was, however, included as depreciation expense on the accrual income statement.
The change in accumulated depreciation from Schedule L does not represent depreciation expense for the year if there were a sale of assets during the year that removed a certain amount of accumulated depreciation. In this instance there was apparently a sale that resulted in the removal of $3,338 of accumulated depreciation.
Q: Regarding Benson Manufacturing’s Statement of Cash Flows as of 12/31/14, how did the accountant arrive at the change in Non- Current Assets of $3,742?
A: It appears to be the change in other assets excluding the 2018 leasehold improvement costs that were classified as other assets. Footnote 4, along with information from the balance sheet, provides the necessary information, i.e., $4,781 + $470,414 – $471,453 = $3,742.