Drake Software User's Manual Tax Year 2011 Supplement: S ...

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Income and DeductionsDrake Software User’s Manual Supplement• Item I — Number of shareholders during the year (completed automatically basedon the number of K-1s; number can be overridden on line I of screen 1.)NOTE Enter accounting method at the bottom of screen 1.Income and DeductionsIncome and deductions are entered primarily on the INC (Other Income) and DED(Other Deductions) screens.NOTEFor information on the Schedule K items at the bottom of the INCscreen, see “Schedule K: Shareholders’ Pro Rata Share Items” onpage 18.Gross ReceiptsEnter gross receipts (Form 1120S, line 1b) and returns and allowances (line 1d) on theINC screen.The program calculates gross receipts or sales after returns and allowances based ongross receipts, sales, and any direct entry on line 1d.NOTENEW FOR2011The IRS does not require a detail (Ctrl+W) worksheet for gross receipts;therefore, if you are using the trial balance import feature, do notinclude a detail worksheet for this line—or for any other line that doesnot require a detail worksheet. For more on the trial balance worksheet,see “Importing Trial Balance Information” on page 42.Line 1a, Merchant card and third-party payments, is new for Form1120S in 2011; however, because the IRS requires that a zero (0) beentered on this line for 2011, the field for line 1a on the INC screen isinactive (grayed-out).Cost of Goods Sold (Form 1125-A)For cost of goods sold (COGS), complete screen A (Form 1125-A, Cost of GoodsSold).NOTEOn screen A, items 9a through 9f are direct-entry fields and follow theformat of IRS Form 1125-A. For more information on completing thesefields, press F1 or consult the IRS instructions.InventoryInventory amounts entered on lines 1 and 7 of screen A automatically flow to ScheduleL, line 3 (“Inventories”). Note that the Inventories fields on the L screen (ScheduleL - Balance Sheet - Assets) are overrides. Anything entered there overrides theinventory data that flows from screen A.6 Tax Year 2011
Drake Software User’s Manual SupplementIncome and DeductionsLine 5, OtherCostsLine 5 of Form 1125-A is designated for any applicable costs not entered on the previouslines. In Drake, two fields on screen A are provided for line 5: one for other costsexcluding depreciation, and one for depreciation (Figure 2).Figure 2: Other Costs and DepreciationIn the Depreciation field, enter any depreciation that relates to the cost of goods sold(unless the amount is flowing from the 4562 Detail screen with COGS selected fromthe For drop list). (Note that this field is an override field; an entry here overrides thecalculations from the 4562 screen.) Amounts entered in this field automatically adjustthe total depreciation that is carried to page 1 of Form 1120S. For Other costs -excluding depreciation, use a CTRL+W worksheet. The depreciation amount isincluded on the statement for other costs and should not be included in the OtherCosts worksheet.NOTELine 14b on the DED screen is for Form 4562 depreciation that is notentered on screen A or elsewhere on the return.ImportingTrial Balanceto Form1125-AIf using the trial balance import feature (see “Importing Trial Balance Information” onpage 42), enter depreciation amounts directly into the appropriate fields on the trialbalance worksheet, not into the fields in data entry. When the trial balance is imported,the COGS depreciation expense amount flows directly to the appropriate line of Form1125-A and is calculated accordingly.Ordinary Gains and LossesOther Income (Loss)The amount on line 4 (Net gain (loss) from Form 4797, Part II, line 17) of Form 1120Sflows from Form 4797. Amounts can also flow from screen 4562, but only if thatscreen shows assets sold and property type.Enter all amounts for line 5, Other income (loss), on the INC screen. INC screen datais displayed on attached statements in View mode.Amounts from the following screens also flow automatically to line 5:• 6478 (Form 6478, Alcohol and Cellulosic Biofuel Fuels Credit)• 8864 (Form 8864, Biodiesel and Renewable Diesel Fuels Credit)Additional fields on the INC screen include:• Amount of credit for tax on fuelsTax Year 2011 7
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