1-30 Sam Smith (446-46-4646) and Jane Jones (312-12-1212) own and operate The Bike Shop, Inc. The corporation was formed on May 1, 2000. Sam is the president and owns 70% of the stock while Jane is the secretary-treasurer and owns the remaining 30 percent. Both are full-time employees. Sam received a salary of $150,000, and Jane received a salary of $60,000. Other pertinent information is given below.

• The corporation is an accrual-method, calendar-year taxpayer. Inventories are determined using the lower of cost or market method.
• The corporate headquarters are located at 1234 Wheeling Road, Cincinnati, OH 45202
• The employer identification number is 75-4476243.

Assets Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Accounts receivable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Allowance for doubtful accounts . . . . . . . . . . . . . . . . . . . . . . U.S. Treasury bonds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Stocks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inventory. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Equipment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Building . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Accumulated depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . January 1, 2021 $ 110,000 14,000 (2,000) 20,000 50,000 375,000 295,000 164,000 500,000 (211,000) $1,315,000 Liabilities and Equity Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Notes payable (due within 1 year) . . . . . . . . . . . . . . . . . . . . . Capital stock (all common) . . . . . . . . . . . . . . . . . . . . . . . . . . Retained earnings (unappropriated). . . . . . . . . . . . . . . . . . . . January 1, 2021 65,000 500,000 150,000 600,000 $1,315,000 December 31, 2021 $ 691,000 31,000 (6,000) 20,000 70,000 375,000 405,000 164,000 500,000 (251,000) $1,999,000 December 31, 2021 350,000 400,000 150,000 1,099,000 $1,999,000

• The corporation distributed a cash dividend of $60,000 during the year.
• Tax depreciation for the year was $50,000.
• Meals and entertainment include the corporations expense for a suite at Paul Brown Stadium, home of professional footballs Cincinnati Bengals. The cost of the suite was $10,000, which includes event tickets of $4,000.
• The corporations estimated bad debt expense for the year was $5,000. Actual bad debts were $1,000.
• Life insurance premiums were paid on term policies covering the lives of the two owners. The corporation is the beneficiary.
• Dividends received were from stock investment in less than 20% owned U.S. corporations.
• The company took a physical count of its inventory on the last day of the year. On that date, it was determined that ending inventory was $360,000. This is not reflected in the financial statements above.
• Each of the four $37,500 timely made estimated tax payments were recorded as Federal income taxes paid.

Prepare Form 1120 for the corporation. Use 2021 tax law. Use a 2020 1120 Form if the 2021 forms are not available.