Problem 3—C Corporation (FORM 1120)On November 1 2005 Janet Morton and Kim Wong formed Pet Kingdom Inc. to sell pets and pet supplies.Pertinent information regarding Pet Kingdom is summarized as follows:Pet Kingdoms business address is 1010 Northwest Parkway Dallas TX 75225; its telephone number is(214) 555-2211; and its e-mail address is [email protected] employer identification number is 11-1111111 and the principal business activity code is 453910.Janet and Kim each own 50% of the common stock; Janet is president and Kim is vice president of thecompany. No other class of stock is authorized.Both Janet and Kim are full-time employees of Pet Kingdom. Janets Social Security number is 123-456789 and Kims Social Security number is 987-65-4321.Pet Kingdom is an accrual method calendar year taxpayer. Inventories are determined using FIFO andthe lower of cost or market method. Pet Kingdom uses the straight-line method of depreciation for bookpurposes and accelerated depreciation (MACRS) for tax purposes.During 2014 the corporation distributed cash dividends of $250000.Pet Kingdoms financial statements for 2014 are shown below. Income StatementIncomeGross SalesSales returns and allowancesNet SalesCost of goods soldGross ProfitDividends received from stockInvestments in less-than-20%owned U.S. corporationsInterest Income:State bondsCertificates of depositTotal incomeExpensesSalaries-officersJanet MortonKim WongSalaries-clerical and salesTaxes (state local and payroll)Repairs and maintenanceInterest Expense:Loan to purchase state bondsOther business loansAdvertisingRental expense $5750000(200000)$5550000(2300000)$325000043750 $1500020000 $262500262500 $ 9000207000 35000$3328750 $52500072500023800014000021600058000109000 Depreciation*106000Charitable contributions38000Employee benefit programs60000Premiums on term life40000insurance policies on lives ofJanet Morton and Kim Wong;Pet Kingdom is the designatedbeneficiaryTotal expenses(2255000)Net Income before taxes$1073750Federal income tax(356023)Net income per books$717727*Depreciation for tax purposes is $136000. You are not provided enough detailed data to complete aForm 4562 (depreciation). If you solve this problem using H&R Block Tax Software enter the amountof depreciation on line 20 of Form 1120. Balance SheetAssetsCashTrade notes and accountsreceivableInventoriesStock InvestmentState bondsCertificates of deposit January 1 2014$ 12000002062500 December 31 2014$ 10377502147000 27500001125000375000400000 30300001125000375000400000 Prepaid Federal TaxBuildings and other depreciableassetsAccumulated depreciationLandOther assetsTotal assetsLiabilities and EquityAccounts PayableOther current liabilitiesMortgagesCapital stockRetained earningsTotal liabilities and equity -05455000 39775455000 (606000)812500140000$13714000January 12014$ 2284000175000462500025000004130000$ 13714000 (712000)812500128500$13802727December 31 2014$ 1975000155000457500025000004597727$ 13802727 During 2014 Pet Kingdom made estimated tax payments of $90000 each quarter to the IRS. Prepare aForm 1120 for Pet Kingdom for tax year 2014. Suggested software: H&R BLOCK Tax Software.