2: Olive Corporation was formed and began operations on January 1, 2020. Olive Corporation is an S corporation which is owned 50 percent by Linda Holiday and 50 percent by Ralph Winston. The corporation's income statement for the year and the balance sheet at year-end are presented below. The Olive Corporation Income Statement for the Year Ended December 31, 2020 Gross income from operations Qualified dividends received from a 35 percent- owned domestic corporation Total gross income Cost of goods sold Total income Other expenses: Compensation of officers $270,000 20,000 $290,000 (110,000) $180,000 $77,000 Salaries and wages 30,000 Bad debts (direct charge-offs) 9,000 Repairs 3,000 Depreciation for book and tax purposes 10,000 Advertising 2,000 Payroll taxes 16,000 Total other expenses (147,000) $33,000 Net income (before federal income tax expense) The Olive Corporation Balance Sheet as of December 31, 2020 Assets: Cash $30,000 Accounts receivable 20,000 Inventory (at cost) 70,000 Equipment 90,000 Less: accumulated depreciation (10,000) Total assets $200,000 Liabilities and owners' equity: Accounts payable $2,000 Note payable (due in 10 years) 85,000 Common stock 80,000 Retained earnings Total liabilities and owners' equity 33,000 $200,000 The corporation is not subject to any special taxes and no estimated tax payments are made. Required: Prepare Form 1120S and Linda Holiday's K-1 form. 1. Enter all amounts as positive numbers, except for a "loss". If required, enter a "loss" as a negative number on the tax form. 2. If an amount box does not require an entry, or the answer is zero, enter "0".. Problem 3: Emily Jackson (Social Security number 765-12-4326) and James Stewart (Social Security number 466-74-9932) are partners in a partnership that owns and operates a barber shop. The partnership's first year of operation is 2020. Emily and James divide income and expenses equally. The partnership name is J&S Barbers, it is located at 1023 Broadway, New York, NY 10004, and its Federal ID number is 95-6767676. The 2018 financial statements for the partnership are presented below. J&S Barbers Income Statement for the Year Ending December 31, 2020 Gross income from operations Deductions: Salaries to employees Payroll taxes $372,300 94,600 14,500 Supplies 9,000 Rent Depreciation 41,000 5,100 Short-term capital loss 2,000 Charitable contributions 500 Net income $205,600 Partners' withdrawals (each partner) $80,000 J&S Barbers Balance Sheet as of December 31, 2020 Assets: Cash Accounts receivable. Equipment $100,450 10,000 $32,000 Problem 3: Emily Jackson (Social Security number 765-12-4326) and James Stewart (Social Security number 466-74-9932) are partners in a partnership that owns and operates a barber shop. The partnership's first year of operation is 2020. Emily and James divide income and expenses equally. The partnership name is J&S Barbers, it is located at 1023 Broadway, New York, NY 10004, and its Federal ID number is 95-6767676. The 2018 financial statements for the partnership are presented below. J&S Barbers Income Statement for the Year Ending December 31, 2020 Gross income from operations Deductions: Salaries to employees Payroll taxes Supplies Rent Depreciation $372,300 94,600 14,500 9,000 41,000 5,100 Short-term capital loss 2,000 Charitable contributions 500 Net income $205,600 Partners' withdrawals (each partner) $80,000 J&S Barbers Balance Sheet as of December 31, 2020 Assets: Cash Accounts receivable Equipment Accum. depreciation Liabilities and Capital: Accounts payable Notes payable $100,450 10,000 $32,000 (5,100) 26,900 $137,350 $29,750 22,000 Partners' capital ($20,000 contributed by each partner) 85,600 Accounts payable $29,750 22,000 Notes payable Partners' capital ($20,000 contributed by each partner) 85,600 $137,350 Emily lives at 456 E. 70th Street, New York, NY 10006, and James lives at 436 E. 63rd Street, New York, NY 10012. Required: Complete the Form 1065 and the accompanying K-1 (K-1for Emily and another K-1 for James) forms Only. Do not complete Schedule D for the capital loss, Form 4562 for depreciation, or Schedule B-1 related to ownership of the partnership. Make realistic assumptions about any missing data. If an amount box does not require an entry or the answer is zero, enter "0". If required, round your answers to nearest dollar. Enter amounts as positive numbers, except for a "loss". If required, enter a "loss" as a negative number on the tax form. Assume all debt is recourse debt. MacBook Pro