Please review my work in the tax return

. While James Craig and his former classmate Paul Dolittle both studied accounting at school, they ended up pursuing careers in professional cake decorating. Their company, Good to Eat (GTE), specializes in custom- sculpted cakes for weddings, birthdays, and other celebrations. James and Paul formed the business at the beginning of 2020, and each contributed $50,000 in exchange for a 50 percent ownership interest. GTE also borrowed $200,000 from a local bank. Both James and Paul had to personally guarantee the loan. Both owners provide significant services for the business. The following information pertains to GTE's 2020 activities: GTE uses the cash method of accounting (for both book and tax purposes) and reports income on a calendar-year basis. GTE received $450,000 of sales revenue and reported $210,000 of cost of goods sold (it did not have any ending inventory). GTE paid $30,000 compensation to James, $30,000 compensation to Paul, and $40,000 of compensation to other employees (assume these amounts include applicable payroll taxes, if any). GTE paid $15,000 of rent for a building and equipment, $20,000 for advertising, $14,000 in interest expense, $4,000 for utilities, and $2,000 for supplies. GTE contributed $5,000 to charity. GTE received a $1,000 qualified dividend from a great stock investment (it owned 2 percent of the corporation distributing the dividend), and it recognized $1,500 in short-term capital gain when it sold some of the stock. On December 1, 2020, GTE distributed $20,000 to James and $20,000 to Paul. GTE has qualified property of $300,000 (unadjusted basis). (Leave no answer blank. Enter zero if applicable. Enter N/A if not applicable.) a-1. Assume James and Paul formed GTE as an S corporation. Complete GTE's Form 1120-S, page 1; Form 1120-S, Schedule K OMB No 1545-0123 Form 1120-S U.S. Income Tax Return for an S Corporation Do not file this form unless the corporation has filed or Department of the Treasury is attaching Form 2553 to elect to be an S corporation. Internal Hewen Service Go to www.irs.gov/Fomf120S for instructions and the latest information. For calendar year 2019 or tax year beginning 2019. ending A Section effective date Naung 2019 20 D Employer identification number TYPE B Business activity code OR Number, strect, and room or suite no. If a P.O. box, see instructions. E Date incorporated numbur (sce instrucli) PRINT City of town, state or province, country, and ZIP or foreign postal code F Total assets see instructions Check f&ch M 3 actes $ G is the corporation electing to be an Scorporation beginning with this tax year? Yes No if "Yes," attach Form 2553 if not already filled H Check it: (1) Final return (2) Name change (3) Address change (4) Amended return (5) Selection termination or revocation | Enter the number of shareholders who were shareholders during any part of the tax year ... Check if corporation: (1) _Aggregated activities for section 465 at-risk purposes (2) _ Grouped activities for section 469 passive activity purposes Caution: Include only trade or business income and expenses on lines 1a through 21. See the instructions for more information 1a Gross receipts or sales 1a 450,000 b Returns and allowances.. 1b Balance. Subtract line 1b from line 1a 10 walance 450,000 2 Cost of goods sold (attach Form 1125-A) 2 210,000 3 Gross profit. Subtract line 2 from line 1c 3 240,000 4 Net gain (lossi from Form 4797, line 17 (attach Form 4797) 4 1,500 5 Other income (loss) (see instructions-attach statement) 5 500 6 Total Income (loss). Add lines 3 tirough 5 6 242,500 7 Compensation of officers (see instructions-attach Form 1125-E) 7 60,000 8 Salaries and wages (less employment credits) 8 40,000 g Repairs and maintenance 9 10 Bad debts 10 11 Rents 11 15,000 12 Taxes and licenses 12 13 Interest (see instructions) 13 14.000 14 Depreciation not claimed on Form 1125-A or elsewhere on return (attach Form 4562) 14 15 Depletion (Do not deduct oll and gas depletion.) 15 16 Advertising 16 20,000 17 Pension, profit-sharing, etc., plans 17 18 49 Employee benefit programs 18 19 Other deductions (attach statement) 19 11,000 20 20 Total deductions. Add lines 7 through 19 20 160 000 21 Ordinary business income (loss). Subtract line 20 from line 6 21 82,500 22a Excess net passive income or LIFO recapture tax (see instructions) 22a Tax from Schedule D (Form 1120-5) 22b c Add lines 22a and 22b isee instructions for additional taxes) 22c 23a 2019 estimated tax payments and 2018 overpayment credited to 2019 23a b Tax deposited with Form 7004 23b Credit for federal tax paid on fuels (attach Form 4136) 23c d Reserved for future use 23d e Add lines 23a through 23d 23e 24 Estimated tax penalty (see instructions). Check if Form 2220 is attached 24 25 Amount owed. If line 23e is smaller than the total of lines 22c and 24, enter amount owed 25 16,062 26 Overpayment. If line 23e is larger than the total of lines 220 and 24, enter amount overpaid 26 27 Enter amount from line 26: Credited to 2020 estimated tax Refunded 27 Under penalties of patury, I dedate that have examined this return, including accompairing schedules and statements, and to the best of my knoxvledge and Sign belief, it is true, correct, and complete. Declaration of preparer iother than texpayeri is based on all information of which preparer has any knowledge May the IRS discuss this return Here with the prepare shown below? Signature of attice Date Soe instructions. Yes No Paid PrintType proxirer's turne Preparer's signature Dale Check PTIN self-empel Preparer Fim's name Firm's EIN Use Only Fim's address Phone no. For Paperwork Reduction Act Notice, see separate instructions. Cat. No. 11510H Form 1120-S12019) Deductions (see instr Tax and Payments Title