Prepare a Form 1120S and appropriate schedules for AB Custom Saddles, Inc. for tax year 2019 based upon the following facts:

AB Custom Saddles is a Domestic S Corporation formed on 1/1/2004 which immediately elected S status. It has assets of $125,000. Employer ID #41-678910. It is located at 1601 Mill Road, Windriver, MN 56300. Business code 1234567.

AB has two equal owners, Bradley Bailey, SSN 470-31-0202, 1000 3^rd St., Windom, MN 56011 and Alan Anderson, SSN 555-00-2211, address: 1112 Broadway Ave., Minneapolis, MN 56011. Alan works full-time for AB and is paid a salary of $30,000 per year.

AB distributed $2,500 in cash to each Alan and Bradley in 2019 as a non-dividend distribution.

Business information:

Income from sales $175,000

Cost of goods sold 38,000

Rent expense 4,000

Bad Debts expense 2,000

Advertising 3,000

Salaries to non-owners 27,000

Taxes (employees, personal prop) 4,400

Depreciation from previous years (Line 17 4562) 1,000

Repairs 1,000

AB sold XY Inc. stock (capital asset) for $11,000 on 2/1/19 that was purchased on 2/1/04 for $7,000.

AB sold a machine that was fully depreciated on 3/1/19 for $4,000, original cost 10,000, placed in service 4/1/06.

AB bought and placed in service a used machine (7 year property) for $8,000 on June 1, 2019 and wants to expense the entire amount in 2019 if possible.

Its book depreciation for 2019 was $5000. It also increased its allowance for uncollectable accounts by $6000 in 2019 anticipating additional bad debts in 2019.

Required forms:

1120S, Schedule K-1

1120S Schedule D

4562, 4797