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Swift Corporation was formed on January 10, 1995, by James Brown and Martha Swift to sell clothing. Pertinent information regarding Swift is summarized as follows:

c) James and Martha each own one-half of the outstanding common stock; no other class of stock is authorized. James is president of the company, and Martha is secretary- treasurer. Both are full-time employees of the corporation, and each receives a salary of $70,000. Jamess SSN is 123-45-6789; Marthas SSN is 987-65-4321.

d) The corporation uses the accrual method of accounting and reports on a calendar basis. The specific charge-off method is used in handling bad debt losses, and inventories are determined using the lower of cost of market method. For book and tax purposes, the straight-line method of depreciation is used. Assume that the company qualifies as a small business taxpayer for inventory purposes and that it meets the gross receipts test under IRC Sec. 448(c). The company is compliant with any other Federal tax compliance requirements.

e) During 2022, the corporation distributed a cash dividend of $35,000. Swifts profit and loss statement reflects the following information:

Account		Debit	Credit
Gross sales			$1,045,000
Sales returns and allowances		$50,000
Purchases		506,000
Dividends received from stock investments in less-than-20%-owned U.S. corporations			60,000
Interest income
State bonds	$4,000
Certificates of deposit	6,000		10,000
Premiums on term life insurance policies on the lives of James and Martha; Swift Corporation is the designated beneficiary		8,000
Salaries officers		140,000
Salaries clerical and sales		100,000
Taxes (state, local, and payroll)		35,000
Repairs		20,000
Interest expense
Loan to purchase state bonds	$2,000
Other business loans	10,000	12,000
Advertising		8,000
Rental expense		24,000
Depreciation		16,000
Other deductions		21,000

A statement technically needs to be attached to the return to provide detail of the $21,000 other deductions. Exclude this statement from your file.

f) A comparative balance sheet for Swift Corporation reveals the following information:

Assets	January 1, 2022	December 31, 2022
Cash	$240,000	$178,850
Trade notes and accounts receivable	104,200	142,300
Inventories	200,000	256,000
Certificates of deposit	150,000	150,000
State bonds	100,000	100,000
Prepaid Federal tax	-0-	2,530
Stock investment	300,000	400,000
Buildings and other depreciable assets	120,000	120,000
Accumulated depreciation	(44,400)	(60,400)
Land	10,000	10,000
Other assets	1,800	1,000
Total assets	$1,181,600	$1,300,280
Liabilities and Equity	January 1, 2022	December 31, 2022
Accounts payable	$150,000	$125,000
Other current liabilities	40,150	36,300
Mortgages	105,000	100,000
Capital stock	250,000	250,000
Retained earnings (unappropriated)	636,450	788,980
Total liabilities and equity	$1,181,600	$1,300,280

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