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Required information Comprehensive Problem 22-88 (Algo) (LO 22-1, LO 22-2, LO 22-3, LO 22-4, LO 22-5, LO 22-6) 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 2021, and each contributed $280.000 in exchange for a 50 percent ownership Interest GTE also borrowed $1,120.000 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 2021 activities: GTE uses the cash method of accounting (for both book and tax purposes and reports Income on a calendar-year basis GTE received $1.600.000 of sales revenue and reported $750,000 of cost of goods sold (It did not have any ending Inventory). GTE paid $145.000 compensation to James. $145,000 compensation to Paul, and $155.000 of compensation to other employees (assume these amounts Include applicable payroll taxes. If any). GTE paid $38.000 of rent for a building and equipment. $43.000 for advertising, $78,400 in Interest expense, $6,300 for utilities, and $4.300 for supplies. GTE contributed $16.500 to charity. GTE received a $5.600 qualified dividend from a great stock investment (It owned 2 percent of the corporation distributing the dividend), and it recognized $3.800 In short-term capital gain when it sold some of the stock. On December 1, 2021. GTE distributed $43,000 to James and $43,000 to Paul. GTE has qualified property of $323.000 (unadjusted basis). (Leave no answer blank. Enter zero if applicable. Enter N/A if not applicable.) Comprehensive Problem 22-86 (Algo) Parta-2 a-2 Complete Paul's 1120-s. Schedule K-1 for year 1. Use 2021 tax rules regardless of year on tax form. Employer Identification Number: Good to Eat EIN: 58-1111111 S Corporation EIN: 59-2222222 Shareholder's identifying number: 111-11-1111 Form 1120-5 Schedule K-1 Final K-1 Amended K-1 OMB No 1545-0123 Part III Shareholder's Share of Current Year Income, Deductions, Credits, and Other Items Ordinary business income foss) 13 Credits 1 Schedule K-1 2020 (Form 1120-5) Department of the Treasury For calendar year 2020, or tax year Internal Revenue Service beginning anding Shareholder's Share of Income, Deductions, Credits, etc. See back of form and separate instructions. 2020 20 2 Not rental real estate income foss) 3 Othernet rental income (loss 14 Foreign transactions 4 Interest income Partl Information About the Corporation A Corporation's employer identification number Ea Ordinary dividends B Corporation's name, address, city, state and ZIP code 6b Qualified dividends 8 Royalties CIRS Center where corporation tiedotum 7 Not short-term capital gains Part II Information About the Shareholder & Not long-term capital gain (loss) D Shareholder's identifying number 3b Collectibles (285) gains 15 Altmative minimum tex (AMT) tons E Shareholder's name, address, city, state and ZIP code 80 Unrecaptured section 1250 gain 9 Net section 1231 gain loss 10 Other income oss 16 Items affecting shareholder basis F Current year alocation percentage A D Shareholder's number of shares Beginning of tax year End of tax year 11 Section 179 deduction 12 Other deduction H Loans from Shareholder Beginning of tax year End of tax your A 17 Other information A V 2TMT For IRS Use Only 18 JU More than one activity for at-risk purposes More than one activity for active activity purpose 12 Required information Comprehensive Problem 22-88 (Algo) (LO 22-1, LO 22-2, LO 22-3, LO 22-4, LO 22-5, LO 22-6) 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 2021, and each contributed $280.000 in exchange for a 50 percent ownership Interest GTE also borrowed $1,120.000 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 2021 activities: GTE uses the cash method of accounting (for both book and tax purposes and reports Income on a calendar-year basis GTE received $1.600.000 of sales revenue and reported $750,000 of cost of goods sold (It did not have any ending Inventory). GTE paid $145.000 compensation to James. $145,000 compensation to Paul, and $155.000 of compensation to other employees (assume these amounts Include applicable payroll taxes. If any). GTE paid $38.000 of rent for a building and equipment. $43.000 for advertising, $78,400 in Interest expense, $6,300 for utilities, and $4.300 for supplies. GTE contributed $16.500 to charity. GTE received a $5.600 qualified dividend from a great stock investment (It owned 2 percent of the corporation distributing the dividend), and it recognized $3.800 In short-term capital gain when it sold some of the stock. On December 1, 2021. GTE distributed $43,000 to James and $43,000 to Paul. GTE has qualified property of $323.000 (unadjusted basis). (Leave no answer blank. Enter zero if applicable. Enter N/A if not applicable.) Comprehensive Problem 22-86 (Algo) Parta-2 a-2 Complete Paul's 1120-s. Schedule K-1 for year 1. Use 2021 tax rules regardless of year on tax form. Employer Identification Number: Good to Eat EIN: 58-1111111 S Corporation EIN: 59-2222222 Shareholder's identifying number: 111-11-1111 Form 1120-5 Schedule K-1 Final K-1 Amended K-1 OMB No 1545-0123 Part III Shareholder's Share of Current Year Income, Deductions, Credits, and Other Items Ordinary business income foss) 13 Credits 1 Schedule K-1 2020 (Form 1120-5) Department of the Treasury For calendar year 2020, or tax year Internal Revenue Service beginning anding Shareholder's Share of Income, Deductions, Credits, etc. See back of form and separate instructions. 2020 20 2 Not rental real estate income foss) 3 Othernet rental income (loss 14 Foreign transactions 4 Interest income Partl Information About the Corporation A Corporation's employer identification number Ea Ordinary dividends B Corporation's name, address, city, state and ZIP code 6b Qualified dividends 8 Royalties CIRS Center where corporation tiedotum 7 Not short-term capital gains Part II Information About the Shareholder & Not long-term capital gain (loss) D Shareholder's identifying number 3b Collectibles (285) gains 15 Altmative minimum tex (AMT) tons E Shareholder's name, address, city, state and ZIP code 80 Unrecaptured section 1250 gain 9 Net section 1231 gain loss 10 Other income oss 16 Items affecting shareholder basis F Current year alocation percentage A D Shareholder's number of shares Beginning of tax year End of tax year 11 Section 179 deduction 12 Other deduction H Loans from Shareholder Beginning of tax year End of tax your A 17 Other information A V 2TMT For IRS Use Only 18 JU More than one activity for at-risk purposes More than one activity for active activity purpose 12