John Parsons $(123-45-6781)$ and George Smith $(123-45-6782)$ are $70\%$ and $30\%$ owners, respectively, of Premium, Inc. $(11-1111120),$ a candy company located at $100516$th Street, Cut and Shoot, TX $77303.$ Premium's S election was made on January $15,2012,$ its date of incorporation. The following information was taken from the company's $2021$ income statement.

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 $(59,899)$

Book income $704,574$

A comparative balance sheet appears below.

January $1,2021$ December $31,2021$

Cash $ $47,840$ $ $?$

Accounts receivable $93,100123,104$

Inventories $9,6073,467$

Prepaid expenses $8,33317,582$

Building and equipment $138,203185,348$

Accumulated depreciation $(84,235)(?)$

Land $2,0002,000$

Total assets $$214,848$ $$844,422$

Accounts payable $ $42,500$ $ $72,300$

Notes payable $($less than $1$ year$)4,5002,100$

Notes payable $($more than $1$ year$)26,70024,300$

Capital stock $(100$ shares outstanding$)30,00030,000$

Retained earnings $$111,148?$

Total liabilities and capital $$214,848$ $$844,422$

Premium's accounting firm provides the following additional information.

Distributions to shareholders $($not reported on Form $1099-$DIV and

made based on percentage of ownership$)$:

$$100,000$

Beginning balance, Accumulated adjustments account: $111,148$

Ordinary business income for QBI: $639,574$

W$-2$ wages for QBI: $795,205$

UBIA of qualified property $125,000$

Required:

Prepare Premium's Form $1120$S$,$ Additional Information $-$ Continuation Statement, and Schedule K$-1$s for John Parsons and George Smith, $560720$th Street, Cut and Shoot, TX $77303.$Form $1120-$S$,$ A S election effective date

$1/15/2012$ TYPE

OR

PRINT Premium, Inc.

$100516$th Street

Cut and Shoot, TX $77303$ D Employer identification number

$11-1111120$

B Business activity code

number $($see instructions$)$

$311300$ E Date incorporated

$1/15/2012$

C Check if Schedule

M$-3$ attached $$ F Total assets $($see instructions$)$

$fill in the blank dc$116101$ffcbfdf$\_1$

$214,848$

G Is the corporation electing to be an S corporation beginning with this tax year? See instructions. $$ Yes $$ No

H Check if: $(1)$ Final return $(2)$ Name change $(3)$ Address change $(4)$ Amended return $(5)$ S election termination

I Enter the number of shareholders who were shareholders during any part of the tax year $...........................2$

J Check if corporation: $(1)$ Aggregated activities for section $465$ at$-$risk purposes $(2)$ Grouped activities for section $469$ passive activity purposes

Caution: Include only trade or business income and expenses on lines $1$a through $21.$ See the instructions for more information.

$1$a Gross receipts or sales $.....................................1$a fill in the blank dc$116101$ffcbfdf$\_2$

$2,410,000$

b Returns and allowances $....................................1$b

c Balance. Subtract line $1$b from line $1$a $.............................................1$c fill in the blank dc$116101$ffcbfdf$\_3$

$2,410,000$

$2$ Cost of goods sold $($attach Form $1125-$A$)..........................................2$ fill in the blank dc$116101$ffcbfdf$\_4$

$154,676$

$3$ Gross profit. Subtract line $2$ from line $1$c $...........................................3$ fill in the blank dc$116101$ffcbfdf$\_5$

$4$ Net gain $($loss$)$ from Form $4797,$ line $17($attach Form $4797).............................4$

$5$ Other income $($loss$)($see instrs $$ att statement$).....................................5$

$6$ Total income $($loss$).$ Add lines $3$ through $5..................................$