On February 12, 2005, Nancy Trout and Delores Lake formed Kingfisher Corporation to sell fishing tackle. Pertinent information regarding Kingfisher is summarized as follows:

• Kingfishers 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 11-1111113, 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. Nancys Social Security number is 123-45-6788, and Deloress Social Security number is 123-45-6787.

• 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 2019, the corporation distributed cash dividends of $80,000.

Kingfishers financial statements for 2019 are shown below and on the next page.

* You are not provided enough detailed information to complete a Form 4562 (depreciation). If you solve this problem using Intuit ProConnect, enter the amount of deprecation on line 20 of Form 1120.

During 2019, Kingfisher made estimated tax payments of $27,000 each quarter to the IRS. Prepare a Form 1120 for Kingfisher for tax year 2019. Suggested software: ProConnect Tax Online.

Form 1125-A is required if there is inventory. You will need to prepare pp. 1-6 of the 1120. Also prepare Schedule Form 1125-E and Schedule G if necessary. Prepare M-1 instead of M-3.

Check figures: Taxable Income, L. 30 508,000; M-1 line 1 397,320; M-1, line 10 514,000

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Income Statement $2,408,000 (80,000) $2,328,000 (920,000) $1,408,000 12,000 $ 14,000 10,000 24,000 $1,444,000 $160,000 160,000 Income Gross sales Sales returns and allowances Net sales Cost of goods sold Gross profit Dividends received from stock investments in less-than-20%-owned U.S.corporations Interest income: State bonds Certificates of deposit Total income Expenses Salaries-officers: Nancy Trout Delores Lake Salaries-clerical and sales Taxes (state, local, and payroll) Repairs and maintenance Interest expense: Business loans Loan to purchase state bonds Advertising Rental expense Depreciation Charitable contributions Employee benefit programs Premiums on term life insurance policies on lives of Nancy Trout and Delores Lake; Kingfisher is the designated beneficiary Total expenses Net income before taxes Federal income tax Net income per books $320,000 290,000 85,000 56,000 $ 12,000 8,000 20,000 6,000 68,000 40,000 15,000 24,000 16,000 (940,000) $ 504,000 (106,680) $ 397,320 Balance Sheet January 1, 2019 $ 380,000 308,400 900,000 160,000 Assets Cash Trade notes and accounts receivable Inventories State bonds Federal income tax refund Certificates of deposit Stock investments Building and other depreciable assets Accumulated depreciation Land Other assets Total assets Liabilities and Equity Accounts payable Other current liabilities Mortgages Capital stock Retained earnings Total liabilities and equity 140,000 300,000 240,000 (88,800) 20,000 3,600 $2,363,200 January 1, 2019 $ 300,000 80,300 210,000 500,000 1,272,900 $2,363,200 December 31, 2019 $ 337,300 480,280 1,012,000 160,000 1,320 140,000 300,000 240,000 (128,800) 20,000 2,000 $2,564,100 December 31, 2019 $ 233,880 40,000 200,000 500,000 1,590,220 $2,564,100 Income Statement $2,408,000 (80,000) $2,328,000 (920,000) $1,408,000 12,000 $ 14,000 10,000 24,000 $1,444,000 $160,000 160,000 Income Gross sales Sales returns and allowances Net sales Cost of goods sold Gross profit Dividends received from stock investments in less-than-20%-owned U.S.corporations Interest income: State bonds Certificates of deposit Total income Expenses Salaries-officers: Nancy Trout Delores Lake Salaries-clerical and sales Taxes (state, local, and payroll) Repairs and maintenance Interest expense: Business loans Loan to purchase state bonds Advertising Rental expense Depreciation Charitable contributions Employee benefit programs Premiums on term life insurance policies on lives of Nancy Trout and Delores Lake; Kingfisher is the designated beneficiary Total expenses Net income before taxes Federal income tax Net income per books $320,000 290,000 85,000 56,000 $ 12,000 8,000 20,000 6,000 68,000 40,000 15,000 24,000 16,000 (940,000) $ 504,000 (106,680) $ 397,320 Balance Sheet January 1, 2019 $ 380,000 308,400 900,000 160,000 Assets Cash Trade notes and accounts receivable Inventories State bonds Federal income tax refund Certificates of deposit Stock investments Building and other depreciable assets Accumulated depreciation Land Other assets Total assets Liabilities and Equity Accounts payable Other current liabilities Mortgages Capital stock Retained earnings Total liabilities and equity 140,000 300,000 240,000 (88,800) 20,000 3,600 $2,363,200 January 1, 2019 $ 300,000 80,300 210,000 500,000 1,272,900 $2,363,200 December 31, 2019 $ 337,300 480,280 1,012,000 160,000 1,320 140,000 300,000 240,000 (128,800) 20,000 2,000 $2,564,100 December 31, 2019 $ 233,880 40,000 200,000 500,000 1,590,220 $2,564,100