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. Premiums S election was made on January 15, 2012, its date of incorporation. The following information was taken from the companys 2021 income statement.

A comparative balance sheet appears below.

January 1, 2021 December 31, 2021

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

Premiums accounting firm provides the following additional information.

Prepare Premiums Form 1120S and Schedule K1s for John Parsons and George Smith, 5607 20th Street, Cut and Shoot, TX 77303.

InterestincomeGrosssalesreceiptsBeginninginventoryDirectlaborDirectmaterialspurchasedDirectothercostsEndinginventorySalariesandwagesOfficerssalaries($75,000eachtoParsonsandSmith)RepairsDepreciationexpense,taxandbookInterestexpenseRentexpense(operating)TaxesCharitablecontributions(cash)AdvertisingexpensesPayrollpenaltiesOtherdeductionsBookincome$100,0002,410,0009,607(203,102)(278,143)(249,356)3,467(442,103)(150,000)(206,106)(15,254)(35,222)(40,000)(65,101)(20,000)(20,000)(15,000)(59,899)704,574 DistributionstoshareholdersBeginningbalance,AccumulatedadjustmentsaccountOrdinarybusinessincomeforQBIW-2wagesforQBIUBIAofqualifiedproperty$100,000111,148639,574795,205125,000 InterestincomeGrosssalesreceiptsBeginninginventoryDirectlaborDirectmaterialspurchasedDirectothercostsEndinginventorySalariesandwagesOfficerssalaries($75,000eachtoParsonsandSmith)RepairsDepreciationexpense,taxandbookInterestexpenseRentexpense(operating)TaxesCharitablecontributions(cash)AdvertisingexpensesPayrollpenaltiesOtherdeductionsBookincome$100,0002,410,0009,607(203,102)(278,143)(249,356)3,467(442,103)(150,000)(206,106)(15,254)(35,222)(40,000)(65,101)(20,000)(20,000)(15,000)(59,899)704,574 DistributionstoshareholdersBeginningbalance,AccumulatedadjustmentsaccountOrdinarybusinessincomeforQBIW-2wagesforQBIUBIAofqualifiedproperty$100,000111,148639,574795,205125,000