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, 2009, its date of incorporation. The following information was taken from the company's 2015 income statement. Premium's book income for the year was $704,574.

Interest income ............................................................$ 100,000

Gross sales receipts .......................................................2,410,000

Beginning inventory ...................................................... 9,607

Direct labor ................................................................(203,102)

Direct materials purchased ..............................................(278,143)

Direct other costs ..........................................................(249,356)

Ending inventory .......................................................... 3,467

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 2015 comparative balance sheet appears below.

Premium's accounting firm provides the following additional information.
Cash distributions to shareholders .......................................$100,000
Beginning balance, accumulated adjustments account ................$111,148
Using the preceding information, prepare a complete Form 1120S 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 the Form 4562. If any information is missing, make realistic assumptions.

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December 31 January 1 $ 47,840 93,100 9,607 8,333 138,203 (84,235) 2,000 $214,848 123,104 3467 17582 185,348 Accounts receivable Prepaid expenses Building and equipment Accumulated depreciation 2,000 Total assets $844422 Accounts payable Notes payable (less than 1 year) Notes payable (more than 1 year) Capital stock Retained earnings Total liabilities and capital 42,500 4,500 26,700 30,000 111,148 $ 72,300 2,100 24,300 30,000 $844,422