1120 SBC, Inc. Case Study Facts: Using Trial Balance Bridge

SBC, Inc. Case Study Facts: Introduction

Accessing the Bridge Software

From within the return, select Access > Trial Balance.

Trial Balance Bridge is required to complete this case study. If you do not have Trial Balance Bridge installed, you will not be able to access the files referenced in this training exercise.

The file SBCshare.dif file is located in the C:\ProgramFiles(x86)\RIA\RS2019 directory.

Reviewing the Bridge Defaults

From within the tax return:

  1. Select the Access menu, then select Trial Balance Bridge.
  2. Select the Options menu, then select Merge Defaults (while in Bridge).
  3. Check the option: Suppress Merge of Accounts without Balances.
  4. Under separate tabs in Merge Defaults, the following boxes should be checked:
    Page 1

    Merge Page 1: Income and Deductions

    Sch. A

    Merge Schedule A: Cost of Goods Sold

    Sch. K

    Merge Schedule K: Shareholders Share of
    Income, Credits, Deductions

    Sch. L

    Merge Schedule L: Balance Sheet

    Sch. M-1

    Merge Schedule M-1: Rec. of Income(Loss)

    Sch. M-2

    Merge Schedule M-2: Analysis of Shareholders’ Accounts

  5. Click OK.

Importing the Trial Balance and Tax Combination Code Descriptions

Import the precoded trial balance file Sbctb.dif into the Bridge to create the bridge file for the SBC Corporation.

Import the Tax Combination Code Description file Sbctcc.dif into the Bridge to create the detailed descriptions that appear on the tax return.

  1. Select File > Import.
  2. Select User Defined, and click the New button.
  3. For the Source File Import Type, select Trial Balance.
  4. Enter the template name and description. The template will not be saved unless you enter a template name and description.
  5. For the Source File Format, select DIF.
  6. For the Source File Information, browse to where: ?:\SBCtb.dif is saved. Select the file, and click Open, then OK. Now the file should be displayed on your screen:
  7. Click the Import Item Account Number, then click Column A.
  8. Click the Import Item: Account Description, then click Column B.
  9. Click the Import Item: Prior Year Balance, then click Column F.
  10. Click the Import Item: Current Year Balance, then click Column G.
  11. Click the Import Item: Tax Return Code, then click Column C.
  12. Click the Import Item: Tax Combination Code, then click Column D.
  13. Click the Import Item: Property Code, then click Column E.
  14. In the field Import Starting on Line, enter the number 2.
  15. Click Import Now.
  16. Click Yes to save the Import Template.
  17. Click Import, then OK.
  18. Click No, then Done, and Done again.
  19. Repeat the steps above for Tax Combination codes except:
    • Source File Import Type: Select TCC Descriptions
    • Source File Information?:\SBCtcc.dif
  20. Click Done. The Bridge file will validate the data.
  21. Once both files are imported, select Options > Calculate Now.
  22. Select View > Tax Summary.

Adjusting Journal Entries

At this point, enter any journal entries (e.g., book adjustments, tax reclassifications, Schedule M-1, or Schedule M-2 adjustments.) into the bridge.

  1. Access the journal entry screens by selecting Ledger > Journal Entries.
  2. Select the type of journal entry to enter. Journal entries are needed for Tax Reclassifications and M-1 Adjustments.

    Journal entry descriptions are entered automatically. These entries may not match the description examples used below. Enter the Tax Reclassification entry below.

    G/L Acct.#

    Description

    		Debit Credit
    TAX41-210Officers’ Compensation 1,775,000 
    1120Salaries 

    1,775,000

  3. Select Schedule M-1 Adjustments as the type of entry you wish to enter, and then click New. Click Done after each journal entry.
  4. Enter the following M-1 adjusting entries:
    G/L Acct.#

    Description

    		Debit Credit
    TAX60-216Travel & Entertainment73,000 
    1924Meals & Entertainment 

    73,000

    TAX60-240 Other Book Expenses20,000 
    1908Outside Services 20,000
    456Tax-Exempt Interest Income

    15,000

    		 
    TAX60-410 Tax-Exempt Interest  

    15,000

    TAX60-223Bad Debts

    150,000

    		 
    1160 Bad Debts 

    150,000

    1760 Employee Benefit Programs1,800,000 
    TAX60-240 Other Book Expenses 

    1,800,000

    TAX60-240.001 Bonuses Payable-Shrhlders

    2,500,000

    		 
    TAX60-240.002 Wages Payable-Shareholders100,000 
    TAX60-240.003Bonuses

    1,000,000

    		 
    1120Salaries  

    3,600,000

    TAX40-110 COGS: Beginning Inventory

    250,000

    		 
    TAX60-540.001 263A Adj. Beg. of Yr. 

    250,000

    TAX60-240.004 263A Adj. End of Yr.

    350,000

    		 
    TAX40-190 COGS: Ending Inventory 

    350,000

    1500Depreciation

    255,299

    		 
    TAX60-510Depreciation 

    255,299

    522 Depreciation

    1,370,267

    		 
    TAX60-510Depreciation 

    1,370,267

  5. Enter the following M-2 adjusting entry:
    G/L Acct.#

    Description

    		Debit Credit
    TAX62-320Distributions, non Div.6,235,800 
    M2_BAL (Automatic) 

    6,235,800

Reviewing Before Merging

  1. After the journal entries have been entered, verify that the Bridge is in Balance (Options > Calculate Now, then View > Tax Summary).

    Page 1 and Schedule M-3 are out of balance. This condition is to be ignored in this case study.
  2. Merge the bridge data into the Tax Application (Options > Merge Now). Click Yes if the program asks if you want to continue.
  3. Print and review the Bridge Workpaper by selecting File > Print. You can select File > Print Preview to review the workpapers when a hard copy is not needed.
  4. Exit the Bridge.

Importing from the Shareholder Template

Once in the locator:

  1. Select File > Import > Shareholder Information. The shareholder dialog box appears.
  2. Click Browse, and open the DIF file which is to be imported. Alternatively, the path and import file name may be typed into the Shareholder Import dialog box. The file path and export file name should now appear in the box below the DIF File caption. The file SBCShare.dif is located in the C:\ProgramFiles(x86)\RIA\RS2019 directory.
  3. To verify that the correct DIF file is selected, click the View button to view the spreadsheet before importing it.
  4. Click the Import button and the specified template will be imported into the 1120 Tax Application. After the import is complete, the same dialog box from step 3 is displayed.
  5. After the process is complete, click Done to close the dialog box. The process of importing the Shareholder Template is now complete. The spreadsheet information is imported directly into the Organizer screens in the Shareholder Data folder.
  6. Perform a full recompute of the 1120 S locator and review Shareholder Information > Shareholder Data > Shareholder Information for accuracy and completeness of data transfer into the Organizer. Select Quick Track > Shareholder Information.

    OR

    Select Shareholder Information > Shareholder Data > Shareholder Information. Click the name of the shareholder to be viewed. Select each shareholder to check that the information imported properly.

    NameSSN Address

    Beginning
    Number of Shares

    Kathleen Jackson 666-44-1115

    1110 Old Gulph Road
    Downers Grove, IL 62356

    		100
    Jennifer Sweet209-36-4574 46 Clwyd Road
    Chicago, IL 60699    		100
    Jonathan Sweet 177-34-585746 Clwyd Road
    Chicago, IL 60699    		100
    Forest Mayer 199-36-5861 247 E. Gravers Lane
    Winnetka, IL 60425    		100
    John Lloyd 200-36-6592 314 S. Philip Street
    Carol Stream, IL 65235    		100
    Mark Lloyd209-24-3160 431 Spruce St.
    Chicago, IL 60684    		500

 

 

 

Case Study Facts/sbc_using_tbb.htm/TY2019

Last Modified: 03/19/2020

Last System Build: 06/17/2021

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