In: Accounting
Jack, a geologist, had been debating for years whether or not to venture out on his own and operate his own business. He had developed a lot of solid relationships with clients, and he believed that many of them would follow him if he were to leave his current employer. As part of a New Year’s resolution, Jack decided he would finally do it. Jack put his business plan together, and, on January 1 of this year, Jack opened his doors for business as a C corporation called Geo-Jack (GJ). Jack is the sole shareholder. Jack reported the following financial information for the year (assume GJ reports on a calendar year, uses the accrual method of accounting, and elects to account for inventory).
Required:
a. What is GJ’s net business income for tax purposes for the year?
b. As a C corporation, does GJ have a required tax year? If so, what would it be?
c. If GJ were a sole proprietorship, would it have a required tax year-end? If so, what would it be?
d. If GJ were an S corporation, would it have a required tax year-end? If so, what would it be?