KJJ Corp. was formed on October 10, 2001 by Kimberly Jen (123-45-6789), Jennifer James (234-56\(7890)\) and James \(\operatorname{Kim}(345-67-8901)\). It is a hardware store and is located at 175 Clerk Road, Newtown, OH 45105. KJJ's employer identification number is 10-1010101 and its business code is 444130 . KJJ's telephone number is 513-525-1234 and its e-mail address is KJJCorp@kjj.com.

KJJ Corp. uses the calendar year and the accrual basis. It uses straight-line depreciation for tax and book purposes and FIFO and lower-of-cost-or-market for inventory purposes.

Kimberly, Jennifer and James each received 200 shares of KJJ Corp.'s common stock on October 10, 2001. No other stock has been issued or is outstanding. Each is a fulltime employee of the firm and each is paid \(\$ 200,000\).

KJJ Corp. made a \(\$ 105,000\) ( \(\$ 35,000\) to each owner) cash distribution in 2017.

During 2017, KJJ Corp. made estimated federal tax payments of \(\$ 55,000\) each quarter.

Financial information for 2017 follows:

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Income Statement Income Sales Sales returns and allowances Net sales Cost of goods sold Cross profit Interest income Corporate bonds State bonds Dividend income Total income Expenses Selaries-officers Salaries and wages-other Life insurance premiums on three owners/officers Kjj Corp. is the beneficiary Repairs and maintenance Taxes (state, local, payro.l} Interest expense Loans to acquire state bonds Other Advertising Charitable contribution $25,000 47,000 Depreciation Employee benefits program Total expenses Net Income before taxes Federa, income taxes Net income per books $20,000 60,000 $600,000 510.000 20,000 30.000 249,000 72,000 36.000 25,000 120,000 63.000 $5,400,000 20,000 5,380,000 3,120,000 2,260,000 80,000 100,000 $2,440,000 1,725.000 $715,000 (214,200) $500,800