Question
John Parsons (123-45-6781) and George Smith (123-45-6782) are 70% and 30% owners, respectively, of Premium, Inc. (11-1111111), a candy company located at 1005 16th Street,
John Parsons (123-45-6781) and George Smith (123-45-6782) are 70% and 30% owners, respectively, of Premium, Inc. (11-1111111), a candy company located at 1005 16th Street, Cut and Shoot, TX 77303. Premium's S election was made on January 15, 2009, its date of incorporation. The following information was taken from the company's 2015 income statement.
Interest income$100,000
Gross sales receipts2,410,000
Beginning inventory9,607
Direct labor(203,102)
Direct materials purchased(278,143)
Direct other costs(249,356)
Ending inventory3,467
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 income704,574
A comparative balance sheet appears below.
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