On February 12, 2005, Nancy Trout and Delores Lake formed Kingfisher Corporation to sell fishing tackle. Pertinent information regarding Kingfisher is summarized as follows. Kingfisher's business address is 1717 Main Street, Ely, MN 55731; its telephone number is (218) 555-2211; and its e-mail address is kingfisher@kf.com. The employer identification number is 11-1111111, and the principal business activity code is 451110.

Nancy owns 50% of the common stock and is president of the company, and Delores 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. Nancy's Social Security number is 123-45-6789, and Delores's Social Security number is 987-65-4321.

Kingfisher is an accrual method, calendar year taxpayer. Inventories are determined using FIFO and the lower of cost or market method. Kingfisher uses the straight-line method of deprecation for book purposes and accelerated depreciation (MACRS) for tax purposes. During 2018, the corporation distributed cash dividends of $80,000. Kingfisher's financial statements for 2018 are shown below.

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%-owned U.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 policies on lives of Nancy Trout and Delores Lake; Kingfisher is the designated beneficiary		16,000
Total expenses			(940,000)
Net income before taxes			$ 504,000
Federal income tax			(106,680)
Net income per books			$397,320

*The depreciation expense for taxes is the sames as the depreciation expense per the books.

Balance Sheet
Assets	January 1, 2018		December 31, 2018
Cash	$ 380,000		$ 337,300
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-		1,320
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, 2018		December 31, 2018
Accounts payable	$ 300,000		$ 223,880
Other current liabilities	80,300		40,000
Mortgages	210,000		200,000
Capital stock	500,000		500,000
Retained earnings	1,272,900		1,590,220
Total liabilities and equity	$2,363,200		$2,564,100

During 2018, Kingfisher made estimated tax payments of $27,000 each quarter to the IRS. Prepare form 1125-A, schedule G and Form 1125-E for Kingfisher for tax year 2018