Julio and Milania are owners of Falcons Corporation, an S corporation. Each owns 50 percent of Falcons Corporation. In year 1, Julio and Milania each received distributions of $14,000 from Falcons Corporation.
Julio and Milania are owners of Falcons Corporation, an S corporation. Each owns 50 percent of Falcons Corporation. In year 1, Julio and Milania each received distributions of $14,000 from Falcons Corporation.
Chapter12: S Corporations
Section: Chapter Questions
Problem 6BCRQ
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Required information
Problem 11-52 (LO 11-3) (Algo)
[The following information applies to the questions displayed below.]
Julio and Milania are owners of Falcons Corporation, an S corporation. Each owns 50 percent of Falcons Corporation. In
year 1, Julio and Milania each received distributions of $14,000 from Falcons Corporation.
Falcons Corporation (an S Corporation)
Income Statement
December 31, Year 1 and Year 2
Year 1
Year 2
$ 330, 000
(42, 000)
(40, 000)
(30, 000)
(20, 000)
(30, 000)
10, 000
$ 460, 000
(65, 000)
(80, 000)
(60, 000)
(40, 000)
(50, 000)
Sales revenue
Cost of goods sold
Salary to owners Julio and Milania
Employee wages
Depreciation expense
Section 179 expense
Interest income (related to business income)
18, 500
3, 600
(3, 000)
$ 184, 100
Municipal bond income
1, 300
Government fines
Overall net income
$ 179, 300
$ 28, 000
$ 50, 000
Distributions
Problem 11-52 Part a (Algo)
a. What amount of ordinary income and separately stated items are allocated to them for year 1 based on the information above?
Assume that Falcons Corporation has $230,000 of qualified property (unadjusted basis).
Allocated to Allocated to
Julio
Amount
Milania
Ordinary Income](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F73907ca2-1228-44b0-96a3-eb2affd82e48%2F38a91fe5-3658-4b48-b2c0-3fd352f3e0ac%2F6fqcoo6_processed.png&w=3840&q=75)
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Required information
Problem 11-52 (LO 11-3) (Algo)
[The following information applies to the questions displayed below.]
Julio and Milania are owners of Falcons Corporation, an S corporation. Each owns 50 percent of Falcons Corporation. In
year 1, Julio and Milania each received distributions of $14,000 from Falcons Corporation.
Falcons Corporation (an S Corporation)
Income Statement
December 31, Year 1 and Year 2
Year 1
Year 2
$ 330, 000
(42, 000)
(40, 000)
(30, 000)
(20, 000)
(30, 000)
10, 000
$ 460, 000
(65, 000)
(80, 000)
(60, 000)
(40, 000)
(50, 000)
Sales revenue
Cost of goods sold
Salary to owners Julio and Milania
Employee wages
Depreciation expense
Section 179 expense
Interest income (related to business income)
18, 500
3, 600
(3, 000)
$ 184, 100
Municipal bond income
1, 300
Government fines
Overall net income
$ 179, 300
$ 28, 000
$ 50, 000
Distributions
Problem 11-52 Part a (Algo)
a. What amount of ordinary income and separately stated items are allocated to them for year 1 based on the information above?
Assume that Falcons Corporation has $230,000 of qualified property (unadjusted basis).
Allocated to Allocated to
Julio
Amount
Milania
Ordinary Income
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ISBN:
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Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT