John Parsons (123-45-6781) and George Smith (123-45-6782) are 70% and 30% owners, respectively, of Premium, Inc. (11-1111111), 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. Premium’s book income for the year was $704,574.

Premium’s accounting firm provides the following additional information.

Using the preceding information, prepare a Form 1120S and Schedule K–1s for John Parsons and George Smith, both of whom live at 5607 20th Street, Cut and Shoot, TX 77303. If any information is missing, make realistic assumptions. Suggested software: ProConnect Tax.

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$ 100,000 Interest income Gross sales receipts 2,410,000 9,607 Beginning inventory Direct labor (203,102) Direct materials purchased (278,143) Direct other costs (249,356) Ending inventory Salaries and wages 3,467 (442,103) Officers' salaries ($75,000 each to Parsons and Smith) (150,000) Repairs (206,106) Depreciation expense, tax and book Interest expense (15,254) (35,222) Rent expense (operating) (40,000) Тахes (65,101) Charitable contributions (cash) ($20,000) Advertising expenses Payroll penalties (20,000) (15,000) Other deductions (59,899)