Note: This problem is for the $2022$ tax year.

On November $1,2011,$ 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 Kingdom's 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. Janet's Social Security number is $123-45-6788,$ and Kim's 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 $2022,$ the corporation distributed cash dividends of $$250,000.$

Pet Kingdom's financial statements for $2022$ are shown below.

Income Statement

Income

Gross sales $$5,750,000$

Sales returns and allowances $(200,000)$

Net sales $$5,550,000$

Cost of goods sold $(2,300,000)$

Gross profit $$3,250,000$

Dividends received from stock

investments in less$-$than$-20\%-$

owned U$.$S$.$ corporations $43,750$

Interest income:

State bonds $$15,000$

Certificates of deposit $20,00035,000$

Total income $$3,328,750$

Expenses

Salaries$$officers:

Janet Morton $$262,500$

Kim Wong $262,500$ $$525,000$

Salaries$$clerical and sales $725,000$

Taxes $($state$,$ local, and payroll$)238,000$

Repairs and maintenance $140,000$

Interest expense:

Loan to purchase state bonds $$9,000$

Other business loans $207,000216,000$

Advertising $58,000$

Rental expense $109,000$

Depreciation$*106,000$

Charitable contributions $($cash$)38,000$

Employee benefit programs $60,000$

Premiums on term life insurance

policies on lives of Janet Morton and

Kim Wong; Pet Kingdom is the

designated beneficiary $40,000$

Total expenses $(2,255,000)$

Net income before taxes $$1,073,750$

Federal income tax $(221,734)$

Net income per books $$852,016$

$*$ 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 $1120.$

Balance Sheet

Assets January $1,2022$ December $31,2022$

Cash $$1,200,000$ $$1,039,461$

Trade notes and accounts receivable $2,062,5002,147,000$

Inventories $2,750,0003,030,000$

Stock investment $1,125,0001,125,000$

State bonds $375,000375,000$

Certificates of deposit $400,000400,000$

Prepaid Federal tax $02,266$

Buildings and other depreciable assets $5,455,0005,455,000$

Accumulated depreciation $(606,000)(712,000)$

Land $812,500812,500$

Other assets $140,000128,500$

Total assets $$13,714,000$ $$13,802,737$

Liabilities and Equity January $1,2022$ December $31,2022$

Accounts payable $$2,284,000$ $$1,840,711$

Other current liabilities $175,000155,000$

Mortgages $4,625,0004,575,000$

Capital stock $2,500,0002,500,000$

Retained earnings $4,130,0004,732,016$

Total liabilities and equity $$13,714,000$ $$13,802,727$

Required:

During $2022,$ Pet Kingdom made estimated tax payments of $$56,000$ each quarter to the IRS. Prepare Pet Kingdom's corporate tax return for tax year $2022$ using Form $1120($and any other appropriate forms and schedules$).$

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.