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

$20,000$

$35,000$

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

$207,000$

$216,000$

Advertising

$58,000$

Rental expense

$109,000$

Depreciation$*$

$106,000$

Charitable contributions

$38,000$

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

$2,062,500$

$2,147,000$

Inventories

$2,750,000$

$3,030,000$

Stock investment

$1,125,000$

$1,125,000$

State bonds

$375,000$

$375,000$

Certificates of deposit

$400,000$

$400,000$

Prepaid Federal tax

$0$

$2,266$

Buildings and other depreciable assets

$5,455,000$

$5,455,000$

Accumulated depreciation

$(606,000)$

$(712,000)$

Land

$812,500$

$812,500$

Other assets

$140,000$

$128,500$

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

$175,000$

$155,000$

Mortgages

$4,625,000$

$4,575,000$

Capital stock

$2,500,000$

$2,500,000$

Retained earnings

$4,130,000$

$4,732,016$

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 a Form $1120$ for Pet Kingdom for tax year $2022.$

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.