**Need help completing 2019 Schedule L (Federal Form 1120)**

On November 1, 2008, Janet Morton and Kim Wong formed Pet Kingdom, Inc., to sell pets and pet supplies. Pertinent information regarding Pet Kingdom is summarized as follows:

• Pet Kingdoms business address is 1010 Northwest Parkway, Dallas, TX 75225; its telephone number is (214) 555-2211; and its e-mail address is petkingdom@pki.com.

• The employer identification number is 11-1111112, and the principal business activity code is 453910.

• Janet and Kim each own 50% of the common stock; Janet is president and Kim is vice president of the company. No other class of stock is authorized.

• Both Janet and Kim are full-time employees of Pet Kingdom. Janets Social Security number is 123-45-6788, and Kims Social Security number is 123-45-6787.

• Pet Kingdom is an accrual method, calendar year taxpayer. Inventories are determined using FIFO and the lower of cost or market method. Pet Kingdom uses the straight-line method of depreciation for book purposes and accelerated depreciation (MACRS) for tax purposes.

• During 2019, the corporation distributed cash dividends of $250,000.

Pet Kingdoms financial statements for 2019 are shown below.

* Depreciation for tax purposes is $136,000. You are not provided enough detailed data to complete a Form 4562 (depreciation). If you solve this problem using Intuit ProConnect, enter the amount of depreciation on line 20 of Form 1120.

Income Statement Income Assets $ 5.750,000 (200,000) $ 5,550,000 (2,300,000) $3,250,000 Balance Sheet January 1, 2019 $ 1,200,000 2,062,500 2,750,000 1,125,000 375,000 400,000 43,750 $ 15,000 20,000 35,000 $ 3,328,750 Gross sales Sales returns and allowances Net sales Cost of goods sold Gross profit Dividends received from stock investments in less-than-20%- owned U.S. corporations Interest income: State bonds Certificates of deposit Total income Expenses Salaries-officers: Janet Morton Kim Worg Salaries-clerical and sales Taxes (state, local, and payroll) Repairs and maintenance Interest expense: Loan to purchase state bonds Other business loans Advertising Rental expense Depreciation Charitable contributions Employee benefit programs Premiums on term life insurance policies on lives of Janet Morton and Kim Wong: Pet Kingdom is the designated beneficiary Total expenses Net Income before taxes Federal income tax Net income per books Cash Trade notes and accounts receivable Inventories Stock investment State bonds Certificates of deposit Prepaid Federal tax Buildings and other depreciable assets Accumulated depreciation Land Other assets Total assets Liabilities and Equity Accounts payable Other current liabilities Mortgages Capital stock Retained earnings Total liabilities and equity $ 262,500 262,500 December 31, 2019 $ 1,039,461 2,147,000 3,030,000 1,125,000 375,000 400,000 2,266 5,455,000 (712,000) 812,500 128,500 $13,802,727 December 31, 2019 $ 1,840,711 155,000 4,575,000 2,500,000 4,732,016 $13,802,727 5,455,000 (606,000) 812,500 140,000 $13,714,000 January 1, 2019 $ 2,284,000 175,000 4,625,000 2,500,000 4,130,000 $13,714,000 $525,000 725,000 238,000 140,000 $ 9,000 207.000 216,000 58,000 109,000 106,000 38,000 60,000 40,000 (2,255,000) $ 1,073,750 (221,734) $ 852,016 | End of tax year (c) (d) Beginning of tax year (a) (b) 1,200,000 2,062,500 1,039,461 2,147,000 2,750,000 3,030,000 4,625,000 4,575,000 ScheduleL Balance Sheets per Books Assets 1 Cash 2a Trade notes and accounts receivable b Less allowance for bad debts 3 Inventories 4 U.S. government obligations 5 Tax-exempt securities (see instructions) 6 Other current assets (attach statement) 7 Loans to shareholders 8 Mortgage and real estate loans 9 Other investments (attach statement) 10a Buildings and other depreciable assets b Less accumulated depreciation 11a Depletable assets b Less accumulated depletion. 12 Land (net of any amortization) 13a Intangible assets (amortizable only) b Less accumulated amortization 14 Other assets (attach statement) 15 Total assets Liabilities and Shareholders' Equity 16 Accounts payable. 17 Mortgages, notes, bonds payable in less than 1 year 18 Other current liabilities (attach statement). 19 Loans from shareholders 20 Mortgages, notes, bonds payable in 1 year or more 21 Other liabilities (attach statement) 22 Capital stock: a Preferred stock b Common stock 23 Additional paid-in capital. 24 Retained earnings-Appropriated (attach statement) 25 Retained earnings-Unappropriated 26 Adjustments to shareholders' equity (attach statement) 27 Less cost of treasury stock 28 Total liabilities and shareholders' equity