PENDIX E Practice Set Assignments-Comprehensive Tax Return Problens PROBLEM 3-S CORPORATION (FORM 1120S) 1. John Parsons (12345-6781) and George Smith (12345-6782) are 70% and 30% own- 16th Street, Cut and Shoot, TX 77303. Premium's S election was made on January 15, 2010, its date of incorporation. The following information was taken from the com pany's 2017 income statement. Interest income Gross sales receipts Beginning inventory Direct labor Direct materials purchased Direct other costs Ending inventory Salaries and wages Officers' salaries ($75,000 each to Parsons and Smith) s 100,000 2,410,000 9,607 (203,102) (278,143) (249,356) 3,467 (442,103) (150,000) (206,106) (15,254) (35.222) (40,000) (65,101) (20,000) (20,000) (15,000) (59.899) 704,574 rs Depreciation expense, tax and book Interest expense Rent expense (operating) Taxes Charitable contributions (cash) Advertising expenses Payroll penalties Other deductions Book income A comparative balance sheet appears below. December 31, 2017 anuary 1, 2017 47,840 93,100 9,607 8,333 138,203 (84,235) 2,000 Cash Accounts receivable Inventories Prepaid expenses Building and equipment 123,104 3,467 17,582 185,348 Accumulated depreciation Land Total assets 2,000 $844,422 $42,500 4,500 26,700 30,000 111,148 214,848 $ 72,300 2,100 24,300 30,000 Accounts payable Notes payable (less than 1 year) Notes payable (more than 1 year) Capital stock Retained earnings Total lilabilities and capital $844,422 Premium's accounting firm provides the following additional information. Distributions to shareholders Beginning balance, Accumulated adjustments account $100,000 $111,148 Using the preceding information, prepare a Forn 1120S and Schedule K-1s for John Parsons and George Smith, 5607 20th Street, Cut and Shoot, TX 77303. Do not complete the Forms 1125-A, 1125-E, and 4562. If any information is missing, make realistic assumptions