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, 2012, its date of incorporation. The following information was taken from the company's 2020 income statement. Premium's book income for the year was $704,574.

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)

A 2020 comparative balance sheet appears below.

	January 1		December 31
Cash	$ 47,840		$ ?
Accounts receivable	93,100		123,104
Inventories	9,607		3,467
Prepaid expenses	8,333		17,582
Building and equipment	138,203		185,348
Accumulated depreciation	(84,235)		(?)
Land	2,000		2,000
Total assets	$214,848		$844,422
Accounts payable	$ 42,500		$ 72,300
Notes payable (less than 1 year)	4,500		2,100
Notes payable (more than 1 year)	26,700		24,300
Capital stock	30,000		30,000
Retained earnings	$111,148		?
Total liabilities and capital	$214,848		$844,422

Premium's accounting firm provides the following additional information.

Cash 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

Required:

Using the preceding information, prepare a Form 1120S, Additional Information - Continuation Statement, and Schedule K-1s for John Parsons and George Smith, both of whom live at 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.

Complete the Form k-1

Note: You are not required to complete Form 1125-A Cost of goods sold.

671120

Final K-1

Amended K-1

OMB No. 1545-0123

Schedule K-1 (Form 1120-S)

2020

Part III

Shareholder's Share of Current Year Income,

Deductions, Credits, and Other Items

Department of the Treasury Internal Revenue Service

For calendar year 2020, or tax

1	Ordinary business income (loss)	13	Credits
2	Net rental real estate income (loss)
3	Other net rental income (loss)
4	Interest income
5a	Ordinary dividends
5b	Qualified dividends	14	Foreign transactions
6	Royalties
7	Net short-term capital gain (loss)
8a	Net long-term capital gain (loss)
8b	Collectibles (28%) gain (loss)
8c	Unrecaptured section 1250 gain
9	Net section 1231 gain (loss)
10	Other income (loss)	15	Alternative minimum tax (AMT) items
11	Section 179 deduction	16 C	Items affecting shareholder basis
12 A	Other deductions	D
		17	Other information
		A
		AC
		V*	STMT

beginning

/

/

ending

/

/

Shareholder's Share of Income, Deductions, Credits, etc. See separate instructions.

Part I Information About the Corporation

A	Corporation's employer identification number 11-1111120

B	Corporation's name, address, city, state, and ZIP code Premium, Inc. 1005 16th Street Cut and Shoot, TX 77303

C	IRS Center where corporation filed return e-file

Part II Information About the Shareholder

D	Shareholder's identifying number 123-45-6781

E	Shareholder's name, address, city, state, and ZIP code John Parsons 5607 20th Street Cut and Shoot, TX 77303

F

Current year allocation percentage . . .

fill in the blank ff4661024f80f9a_8 %

G	Shareholder's number of shares
	Beginning of tax year . . . . . . . . . . . .	fill in the blank ff4661024f80f9a_9
	End of tax year . . . . . . . . . . . . . . . .	fill in the blank ff4661024f80f9a_10

H	Loans from shareholder
	Beginning of tax year . . . . . . . . . . . .	$
	End of tax year . . . . . . . . . . . . . . . .	$

F O R I R S U S E O N L Y

18 More than one activity for at-risk purposes* 19 More than one activity for passive activity purposes*

*See attached statement for additional information