On August 1, 2006, Janet Weiss and Brad Masters formed Pets R Us, Inc. to sell high-end pet supplies. Pertinent Information is given below:

Pets R Us business address is 2929 N. Carrolton Avenue, New Orleans, LA 70119, its phone number is (504) 555-2211 and its e-mail address is www.pru@cox.net

The employer ID number is 11-11111111, and the principal business activity code is 453910.

Brad and Janet each own 50% of the common stock; Janet is president and Brad is vice-president. No other class of stock is authorized. Both of them are full-time employees of the business. Janets social security number is 123-45-6789 and Brads is 987-65-4321.

The business is an accrual method, calendar year taxpayer. Inventories are determined using FIFO and the lower of cost or market method.

They use the straight-line method of depreciation for book purposes; they use MACRS for tax.

In 2014, the corporation distributed $250,000 in cash dividends.

During 2014, the business made estimated quarterly federal income tax payments of $90,000.

Required: Given the above information and the information below, prepare the form 1120 for Pets R Us for 2014.

Pets R Us
Income Statement
12/31/14
Income
Gross sales			$5,750,000.00
Sales Returns and allowances			$(200,000.00)
Net Sales			$5,550,000.00
Cost of Goods Sold			$(2,300,000.00)
Gross Profit			$3,250,000.00
Dividends Received (Note 1)			$43,750.00
Interest Income
State Bonds	$15,000.00
Certificates of Deposit	$20,000.00		$35,000.00
Total Income			$3,328,750.00
Expenses
Salary - Officers
Janet Weiss	$262,500.00
Brad Majors	$262,500.00	$525,000.00
Salaries - Clerical and sales		$725,000.00
Taxes - State, Local and Payroll		$238,000.00
Repairs and Maintenance		$140,000.00
Interest Expense
Loans to Purchase State bonds	$9,000.00
Other business loans	$207,000.00	$216,000.00
Advertising		$58,000.00
Rental Expense		$109,000.00
Depreciation (Note 2)		$106,000.00
Charitable contributions		$38,000.00
Employee Benefit programs		$60,000.00
Premiums on Key-man life Insurance		$40,000.00
Total Expenses			$2,255,000.00
Net Income before Taxes			$1,073,750.00
Federal Income Tax			$(356,023.00)
Net Income per books			$717,727.00
Note 1: These dividends were received from less-than-20% owned stock in US Corporations
Note 2: Depreciation for tax purposes is $136,000. You don't have sufficient information to complete Form 4562