Required Information 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 2022, and each contributed $180,000 in exchange for a 50 percent ownership interest. GTE also borrowed $720,000 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 2022 activities: ⚫ GTE uses the cash method of accounting (for both book and tax purposes) and reports income on a calendar-year basis. ⚫ GTE received $1,100,000 of sales revenue and reported $510,000 of cost of goods sold (it did not have any ending inventory). ⚫ GTE paid $95,000 compensation to James, $95,000 compensation to Paul, and $105,000 of compensation to other employees (assume these amounts include applicable payroll taxes, if any). ⚫ GTE paid $28,000 of rent for a building and equipment, $33,000 for advertising, $50,400 in interest expense, $5,300 for utilities, and $3,300 for supplies. ⚫ GTE contributed $11,500 to charity. ⚫ GTE received a $3,600 qualified dividend from a great stock investment (it owned 2 percent of the corporation distributing the dividend), and it recognized $2,800 in short-term capital gain when it sold some of the stock. . On December 1, 2022, GTE distributed $33,000 to James and $33,000 to Paul. ⚫ GTE has qualified property of $313,000 (unadjusted basis). Note: Leave no answers blank. Enter zero If applicable. Enter N/A If not applicable. -1. Assume James and Paul formed GTE as a C corporation. Complete GTE's Form 1120, page 1. Note: Use 2022 tax rules regardless of year on tax form. Employer identification number: 58-1111111 Prepare GTE's Form 1120, page 1. Form 1120 21 Depletion 22 Advertising 23 Pension, profit-sharing, etc., plans 24 Employee benefit programs 25 Reserved for future use 26 Other deductions (attach statement) 27 Total deductions. Add lines 12 through 26 28 Taxable income before net operating loss deduction and special deductions. Subtract line 27 from line 11 29a Net operating loss deduction (see instructions) 29b Special deductions (Schedule C, line 24) 29c Add lines 29a and 29b 30 Taxable income. Subtract line 29c from line 28. See instructions 29a 29b 31 Total tax (Schedule J, Part I, line 11) 32 Reserved for future use 33 Total payments and credits (Schedule J, Part III, line 23) 34 Estimated tax penalty. See instructions. Check if Form 2220 is attached 35 Amount owed. If line 33 is smaller than the total of lines 31 and 34, enter amount owed 36 Overpayment. If line 33 is larger than the total of lines 31 and 34, enter amount overpaid 37 Enter amount from line 36 you want. Credited to 2022 estimated tax▸ Refunded 21 22 33,000 23 24 25 26 27 27 8,600 426,500 28 29c 30 31 32 33 34 35 36 37 Under penalties of perjury, I declare that I have examined this return, including accompanying schedules and statements, and to the best of my knowledge and belief, it is true, correct, and complete. Declaration of preparer (other than taxpayer) is based on all information of which preparer has any knowledge. May the IRS discuss this return with the preparer 0