Tax Return Problem 1. John Parsons (123456781) and George Smith (123456782) 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) $100,000 2,410,000 (203,102) (278,143) (442,103) (150,000) (206,106) (15,254) Depreciation expense, tax and book Interest expense Rent expense (operating) Taxes Charitable contributions (cash) (65,101) Payroll penalties Other deductions Book income (15,000) A comparative balance sheet appears below. January 1, 2017 December 31, 2017 47,840 93,100 9,607 Accounts receivable 123,104 3.467 17.582 185,348 Prepaid expenses Building and equipment 138,203 Accumulated depreciation Total assets 422 Accounts payable Notes payable less than 1 year) Notes payable (more than 1 year) Capital stock Retained earnings Total iabilities and capital 42500 $ 72,300 2,100 111.148 214848 $844.422