On February 12, 2002, Nancy Trout and Delores Lake formed Kingfisher Corpora-tion to sell fishing tackle. Pertinent information regarding Kingfisher is summarizedas follows: Kingfishers business address is 1717 Main Street, Ely, MN 55731; its telephonenumber is (218) 555-2211; and its e-mail address is kingfisher @ kf.com. The employer identification number is 11-1111111, and the principal businessactivity code is 451110. Nancy owns 50% of the common stock and is president of the company, andDelores owns 50% of the common stock and is vice president of the company.No other class of stock is authorized. Both Nancy and Delores are full-time employees of Kingfisher. Nancys Social Secu-rity number is 123-45-6789, and Deloress Social Security number is 987-65-4321. Kingfisher is an accrual method, calendar year taxpayer. Inventories are deter-mined using FIFO and the lower of cost or market method. Kingfisher uses thestraight-line method of deprecation for book purposes and accelerated deprecia-tion (MACRS) for tax purposes. During 2014, the corporation distributed cash dividends of $80,000

Kingfishers financial statements for 2014

*****Income Statement********

Income:

Gross sales $2,408,000

Sales returns and allowances (80,000)

Net sales $2,328,000

Cost of goods sold (920,000)

Gross profit $1,408,000

Dividends received from stock investments in less-than-20%-ownedU.S. corporations 12,000

Interest income

State bonds $ 14,000

Certificates of deposit 10,000 24,000

Total income $1,444,000

Expenses:

Salariesofficers

Nancy Trout $160,000

Delores Lake 160,000 $320,000

Salariesclerical and sales 290,000

Taxes (state, local, and payroll) 85,000

Repairs and maintenance 56,000

Interest expense:

Business loans $ 12,000

Loan to purchase state bonds 8,000 20,000

Advertising 6,000

Rental expense 68,000

Depreciation* 40,000

Charitable contributions 15,000

Employee benefit programs 24,000

Premiums on term life insurance policieson lives of Nancy Trout and DeloresLake; Kingfisher is the designated beneficiary 16,000

Total expenses (940,000)

Net income before taxes $ 504,000

Federal income tax (171,904)

Net income per books $ 332,096

************Balance Sheet*********

Assets January 1, 2014 December 31, 2014

Cash $ 380,000 $ 335,524

Trade notes and accounts receivable 308,400 480,280

Inventories 900,000 1,012,000

State bonds 160,000 160,000

Federal income tax refund 0 3,096

Certificates of deposit 140,000 140,000

Stock investments 300,000 300,000

Building and other depreciable assets 240,000 240,000

Accumulated depreciation (88,800) (128,800)

Land 20,000 20,000

Other assets 3,600 2,000

Total assets $2,363,200 $2,564,100

****Liabilities and Equity*** January 1, 2014 December 31, 2014

Accounts payable $ 300,000 $ 299,104

Other current liabilities 80,300 40,000

Mortgages 210,000 200,000

Capital stock 500,000 500,000

Retained earnings 1,272,900 1,524,996

Total liabilities and equity $2,363,200 $2,564,100

During 2014, Kingfisher made estimated tax payments of $43,750 each quarter to the IRS. Prepare a Form 1120 for Kingfisher for tax year 2014.