PROBLEM 6-S CORPORATION (FORM 1120S) John Parsons (123-45-6781) and George Smith (123-45-6782) are 70% and 30% owners, respectively, of Premium, Inc. (11-1111120), a candy company located at 1005 16th Street, Cut and Shoot, TX 77303. Premium's S election was made on January 15, 2012, its date of incorporation. The following information was taken from the company's 2020 income statement. Interest income Gross sales receipts $ 100,000 2,410,000 71 Beginning inventory 9,607 Direct labor (203,102) Direct materials purchased (278,143) Direct other costs (249,356) Ending inventory 3,467 Salaries and wages (442,103) Officers' salaries ($75,000 each to Parsons and Smith) (150,000) Repairs (206,106) Depreciation expense, tax and book (15,254) Interest expense (35,222) Rent expense (operating) (40,000) Taxes Charitable contributions (cash) Advertising expenses Payroll penalties Other deductions Book income (65,101) (20,000) (20,000) (15,000) (59,899) 704,574 A comparative balance sheet appears below. January 1, 2020 December 31, 2020 Cash $ 47,840 $612,410 Accounts receivable 93,100 123,104 Inventories 9,607 3,467 Prepaid expenses 8,333 17,582 Building and equipment 138,203 185,348 Accumulated depreciation (84,235) (99,489) Land 2,000 Total assets $214,848 Accounts payable Notes payable (less than I year) Notes payable (more than I year) Capital stock Retained earnings Total liabilities and capital $ 42,500 2,000 $844,422 $ 72,300 4,500 2,100 26,700 24,300 30,000 30,000 111,148 715,722 $214,848 $844,422 Premium's accounting firm provides the following additional information. Distributions to shareholders Beginning balance, Accumulated adjustments account Ordinary business income for QBI W-2 wages for QBI $100,000 111,148 639,574 795,205 Prepare Premium's Form 1120S and Schedule K-1s for John Parsons and GeorgeSmith, 5607 20th Street, Cut and Shoot, TX 77303. Do not complete the Forms 1125-A, 1125-E, and 4562. (2) Please complete Form 1120-S Tax Return of the "Premium Inc in Problem 6 attached in this folder. Please complete in details and check all boxes if appropriate a) Form 1120 2020 including Schedule B, Schedule K, Schedule L, Schedule M-1, Schedule M-2, Schedule K-1 (John Parsons) Schedule K-1 (George Smith)