On February 12, 2004, Nancy Trout and Delores Lake formed Kingfisher Corporation to sell fishing tackle. Pertinent information regarding Kingfisher is summarized as follows.
€¢ Kingfisher€™s business address is 1717 Main Street, Ely, MN 55731; its telephonenumber is (218) 555-2211; and its e-mail address is kingfisher@kf.com
€¢ The employer identification number is 11-1111111, and the principal business activity code is 451110.
€¢ Nancy owns 50% of the common stock and is president of the company, and Delores owns 50% of the common stock and is vice president of the company. No other class of stock is authorized.
€¢ Both Nancy and Delores are full-time employees of Kingfisher. Nancy€™s Social Security number is 123-45-6789, and Delores€™s Social Security number is 987-65-4321.
€¢ Kingfisher is an accrual method, calendar year taxpayer. Inventories are determined using FIFO and the lower of cost or market method. Kingfisher uses the straight-line method of deprecation for book purposes and accelerated depreciation (MACRS) for tax purposes.
€¢ During 2015, the corporation distributed cash dividends of $80,000.

Kingfisher€™s financial statements for 2016 are shown below.

During 2016, Kingfisher made estimated tax payments of $43,750 each quarter to the IRS. Prepare a Form 1120 for Kingfisher for tax year 2016. Suggested software: H&R Block Tax Software.

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Income Statement Income Gross sales $2,408,000 Sales returns and allowances (80,000) Net sales $2,328,000 Cost of goods sold (920,000) $1,408,000 Gross profit Dividends received from stock investments in less-than-20%-owned US. corporations 12,000 Interest income $ 14,000 10,000 State bonds Certificates of deposit 24,000 Total income $1,444,000 Expenses Salaries-officers $160,000 Nancy Trout Delores Lake $320,000 160,000 Salaries-clerical and sales 290,000 Taxes (state, local, and payroll) Repairs and maintenance 85,000 56,000 Interest expense: $ 12,000 Business loans Loan to purchase state bonds Advertising Rental expense 20,000 8,000 6,000 68,000 Depreciation" 40,000 Charitable contributions 15,000 Employee benefit programs Premiums on term life insurance policies on lives of Nancy Trout and Delores Lake; Kingfisher is the designated beneficiary Total expenses 24,000 16,000 (940,000) $ 504,000 Net income before taxes Federal income tax (171,904) Net income per books 332.096 Balance Sheet Assets January 1, 2016 December 31, 2016 Cash $ 380,000 $ 335,524 Trade notes and accounts receivable 308,400 480,280 Inventories 900,000 1,012,000 State bonds 160,000 160,000 Federal income tax refund -0- 3,096 Certificates of deposit 140,000 140,000 Stock investments 300,000 300,000 Building and other depreciable assets Accumulated depreciation 240,000 240,000 (88,800) (128,800) Land 20,000 20,000 Other assets 3,600 2,000 Total assets $2,363,200 $2,564,100