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 1005 16th Street, Cut and Shoot, TX 77303. Premium's Selection was made on January 15, 2012, its date of incorporation. The following information was taken from the company's 2019 income statement.

Interest income$ 100,000Gross sales receipts2,410,000Beginning inventory9,607Direct labor(203,102)Direct materials purchased(278,143)Direct other costs(249,356)Ending inventory3,467Salaries 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.

January 1, 2019December 31, 2019Cash$ 47,840$ ?Accounts receivable93,100123,104Inventories9,6073,467Prepaid expenses8,33317,582Building and equipment138,203185,348Accumulated depreciation(84,235)(?)Land2,0002,000Total assets$214,848$844,422Accounts payable$ 42,500$ 72,300Notes payable (less than 1 year)4,5002,100Notes payable (more than 1 year)26,70024,300Capital stock30,00030,000Retained 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 a percentage of ownership):

$100,000Beginning balance, Accumulated adjustments account:111,148

Required: Prepare Premium's Form 1120S, Additional Information - Continuation Statement, and Schedule K-1s for John Parsons and George Smith, 5607 20th Street, Cut and Shoot TX 77303.

• If an amount box does not require an entry or the answer is zero, enter "0".
• Enter all amounts as positive numbers, unless otherwise instructed.
• If required, round amounts to the nearest dollar.
• Make realistic assumptions about any missing data.