Olive Corporation was formed and began operations on January 1, 2012. The corporation's income statement for the year and the balance sheet at year-end are presented below.

The corporation made estimated tax payments of $4,000 and the corporation's federal income tax expense is equal to the federal tax liability. Complete Form 1120 for Olive Corporation on pages 11-35 through 11-39. Do not complete Schedule G for ownership information, Form 4562 for depreciation, Form 1125-A for cost of goods sold, or Form 1125-E for compensation of officers. Schedule UTP is not required.
2. Assume that Olive Corporation, in Comprehensive Problem 1, is an S corporation owned 50 percent by Linda Holiday and 50 percent by Ralph Winston. The corporation is not subject to any special taxes. Using the relevant information given in Comprehensive Problem 1 and assuming the corporation's retained earnings are $35,000 instead of $31,850, accounts payable are $10,000 instead of $13,150, and no estimated tax payments are made, complete Form 1120S for Olive Corporation and Schedule K-1 for Linda on pages 11-41 through 11-46. Assume there were no cash distributions during the year. Do not complete Form 1125-A or Form 4562.

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The Olive Corporation Income Statement for the Year Ended December 31, 2012 Gross income from operations Qualified dividends received from a 10 percent- S 260,000 owned domestic corporation 20,000 S 280,000 (105,000 S 175,000 Total gross income Cost of goods sold Total income Other expenses: Compensation of officers Salaries and wages Bad debts (direct charge-offs) Repairs Depreciation Advertising Payroll taxes $75,000 30,000 7,000 3,000 10,000 5,000 10,000 Total other expenses 140,000 S 35,000 Net income (before federal income tax expense Tbe Olive Corporation Balance Sheet as of December 31, 2012 Assets: Cash Accounts receivable Inventory (at cost) Equipment Less: accumulated depreciation S30,000 20,000 80,000 90,000 10,000) Total assets $210,000 Liabilides and owners' equity Accounts payable Note payable (due in 10 years) Common stock Retained earnings $13,150 85,000 80,000 31,850 Total liabilities and owners' equity $210,000