John Parsons (123-45-6871) and George Smith (123-45-6782) are 70% and 30% owners, respectively, of Premium, Inc. (11-1111111), a candy company located at 1005 16thStreet, Cut and Shoot, TX 77303. Premium's S election was made on January 15, 2011, its date of incorporation. The following information was taken from the company's 2018 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 (150,000)

Repairs (206,106)

Depreciation expenses (15,254)

Interest expenses (35,222)

Rent expenses (operating) (40,000)

Taxes (65,101)

Charitable contribution (Cash) (20,000)

Advertising expenses (20,000)

Payroll penalties (15,000)

Other deductions (59,899)

Book income $704,574

A 2018 comparative balance sheet appears below.

1-Jan 31-Dec

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 liabilities and capita 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 $100,000

Beginning balance, accumulated adjusted account $111,148

Using the preceding information, prepare a completeForm 1120s(Links to an external site.)

and Schedule K-1s for John Parsons and George Smith, both of whom live at 5607 20thStreet, Cut and Shoot, TX 77303. Do not complete the Forms1125-A(Links to an external site.)

,1125-E(Links to an external site.)

, and4562(Links to an external site.)

. If any information is missing, make realistic assumptions.

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