On November 1, 2005, Janet Morton and Kim Wong formed Pet Kingdom, Inc., to sell pets and pet supplies. Pertinent information regarding Pet Kingdom is summarized as follows:
Pet Kingdom's business address is 1010 Northwest Parkway, Dallas, TX 75225; its telephone number is (214) 555-2211; and its e-mail address is petkingdom@pki.com.
The employer identification number is 11-1111111, and the principal business activity code is 453910.
Janet and Kim each own 50% of the common stock; Janet is president and Kim is vice president of the company. No other class of stock is authorized.
Both Janet and Kim are full-time employees of Pet Kingdom. Janet's Social Security number is 123-45-6789, and Kim's Social Security number is 987-65-4321.
Pet Kingdom is an accrual method, calendar year taxpayer. Inventories are determined using FIFO and the lower of cost or market method. Pet Kingdom uses the straight-line method of depreciation for book purposes and accelerated depreciation (MACRS) for tax purposes.
During 2014, the corporation distributed cash dividends of $250,000.
Pet Kingdom's financial statements for 2014 are shown below.

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Income Statement Income Gross sales Sales retums and allowances Net sales Cost of goods sold Gross profit Dividends received from stock 5,750,000 (200,000) 5,550,000 (2,300,000) $3,250,000 investments in less-than-20%. owned U.S. corporations 43,750 nterest income: State bonds Certificates of deposit 15,000 20,000 35,000 3,328,750 Total income Expenses Salaries--officers $262,500 262,500 Janet Morton Kim Wong Salaries-derical and sales Taxes (state, local, and payroll) Repairs and maintenance Interest expense: $525000 725000 238,000 140,000 Loan to purchase state bonds 9,000 207,000 Other business loans Advertising Rental expense Depreciation Charitable contributions Employee benefit programs Premiums on term life insurance 216,000 58,000 109,000 106,000 38,000 60,000 policies on lives of Janet Morton and Kim Wong Pet Kingdom is the designated beneficiary 40000 Total expenses Net income before taxes 2,255,000) 1,073,750 Federal income tax Net income per books $717,727 Deprediaton for tax purposes is $136,000.You are not provided enough detailed data to complete a Form 4562 (depreciation). If you solve this problem using H&R BLOCK Tax Software, enter the amount of deprediation on line 20 of Form 1120. Balance Sheet Assets January 1, 2014 December 31, 2014 1,037,750 2,147,000 $1,200,000 Trade notes and accounts receivable 2,062,500 2,750,000 Stock investment State bonds Certificates of deposit Prepaid Federal tax Buildings and other depreciable assets 1,125,00 1,125,000 375,000 375,000 400,000 5,455,000 (606,000) 812,500 140,000 $13,714,000 5,455,000 (712,000) 812,500 128,500 $13,802,727 Other assets Total assets Liabilities and Equity January 1, 2014 December 31, 2014 2,284,000 1,975,000 Accounts payable Other current liabilities Mortgages Capital stock Retained earnings 175,000 155,000 4,625,000 2,500,000 ,130,000 $13,714,000 4,575,000 2,500,000 4,597,727 $13,802,727 Total liabilities and equity During 2014, Pet Kingdom made estimated tax payments of $90,000 each quarter to the IRS. Prepare a