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claudia122752
claudia122752
26.10.2021 • 
Business

John Parsons (123-45-6781) and George Smith (123-45-6782) are 70% and 30% owners, respectively, of Premium, Inc. (11-1111111), a candy company located at 1005 16th Street, Cut and Shoot, TX 77303. Premium's S election was made on January 15, 2012, its date of incorporation. The following information was taken from the company's 2019 income statement. Premium’s book income for the year was $704,574. Interest income$ 100,000
Gross sales receipts2,410,000
Beginning inventory9,607
Direct labor(203,102)
Direct materials purchased(278,143)
Direct other costs(249,356)
Ending inventory3,467
Salaries and wages(442,103)
Officers' salaries ($75,000 each to Parsons and Smith)(150,000)
Repairs(206,106)
Depreciation expense, tax and book(15,254)
Interest expense(35,222)
Rent expense (operating)(40,000)
Taxes(65,101)
Charitable contributions (cash)(20,000)
Advertising expenses(20,000)
Payroll penalties(15,000)
Other deductions(59,899)
A 2019 comparative balance sheet appears below.
January 1 December 31
Cash$ 47,840$ ?
Accounts receivable93,100123,104
Inventories9,6073,467
Prepaid expenses8,33317,582
Building and equipment138,203185,348
Accumulated depreciation(84,235)(?)
Land2,0002,000
Total assets$214,848$844,422
Accounts payable$ 42,500$ 72,300
Notes payable (less than 1 year)4,5002,100
Notes payable (more than 1 year)26,70024,300
Capital stock30,00030,000
Retained earnings$111,148?
Total liabilities and capital$214,848$844,422
Premium's accounting firm provides the following additional information.
Cash distributions to shareholders$100,000
Beginning balance, accumulated
adjustments account
111,148
Required:
Using the preceding information, prepare a Form 1120S, Additional Information - Continuation Statement, and Schedule K-1s for John Parsons and George Smith, both of whom live at 5607 20th Street, Cut and Shoot, TX 77303. Do not complete Forms 1125-A, 1125-E, and 4562.

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