Required information [The following information applies to the questions displayed below.] Julio and Milania are owners of Falcons Corporation, an S corporation. They each own 50 percent of Falcons Corporation. In year 2, Julio and Milania each received distributions of $25,000 from Falcons Corporation. Falcons Corporation (an S Corporation) Income Statement December 31, Year 1 and Year 2 Year 1 Year 2 $430,000 Sales revenue $ 300,000 Cost of goods sold (40,000) (60,000) (40,000) (80,000) Salary to owners Julio and Milania Employee wages (25,000) (50,000) Depreciation expense (20,000) (40,000) Section 179 expense (30,000) (50,000) Interest income (related to 12,000 22,500 business) Municipal bond income Government fines 1,500 4,000 0 (2,000) $ 158,500 $ 174,500 Overall net income Distributions $ 30,000 $ 50,000 a. What amount of ordinary income and separately stated items are allocated to them for year 2 based on the information above? Assume that Falcons Corporation has $200,000 of qualified property (unadjusted basis). Amount Julio Milania Ordinary Income
Required information [The following information applies to the questions displayed below.] Julio and Milania are owners of Falcons Corporation, an S corporation. They each own 50 percent of Falcons Corporation. In year 2, Julio and Milania each received distributions of $25,000 from Falcons Corporation. Falcons Corporation (an S Corporation) Income Statement December 31, Year 1 and Year 2 Year 1 Year 2 $430,000 Sales revenue $ 300,000 Cost of goods sold (40,000) (60,000) (40,000) (80,000) Salary to owners Julio and Milania Employee wages (25,000) (50,000) Depreciation expense (20,000) (40,000) Section 179 expense (30,000) (50,000) Interest income (related to 12,000 22,500 business) Municipal bond income Government fines 1,500 4,000 0 (2,000) $ 158,500 $ 174,500 Overall net income Distributions $ 30,000 $ 50,000 a. What amount of ordinary income and separately stated items are allocated to them for year 2 based on the information above? Assume that Falcons Corporation has $200,000 of qualified property (unadjusted basis). Amount Julio Milania Ordinary Income
Chapter18: Corporations: Organization And Capital Structure
Section: Chapter Questions
Problem 44P
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![Required information
[The following information applies to the questions displayed below.]
Julio and Milania are owners of Falcons Corporation, an S corporation. They each own 50 percent of Falcons Corporation.
In year 2, Julio and Milania each received distributions of $25,000 from Falcons Corporation.
Falcons Corporation (an S Corporation)
Income Statement
December 31, Year 1 and Year 2
Year 2
Year 1
$ 300,000
Sales revenue
$430,000
Cost of goods sold
(40,000)
(60,000)
Salary to owners Julio and Milania
(40,000)
(80,000)
Employee wages
(25,000) (50,000)
Depreciation expense
(20,000) (40,000)
Section 179 expense
(30,000) (50,000)
Interest income (related to
12,000
22,500
business)
1,500
4,000
Municipal bond income
Government fines
0
(2,000)
$ 158,500
$ 174,500
Overall net income
Distributions
$ 30,000
$ 50,000
a. What amount of ordinary income and separately stated items are allocated to them for year 2 based on the information above?
Assume that Falcons Corporation has $200,000 of qualified property (unadjusted basis).
Amount
Julio
Milania
Ordinary Income](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F3f181ed1-b0b6-413f-85b5-e55bebc35843%2F334cf33c-7ba6-41bf-b3b5-402375010aa4%2Fdurafhu_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Required information
[The following information applies to the questions displayed below.]
Julio and Milania are owners of Falcons Corporation, an S corporation. They each own 50 percent of Falcons Corporation.
In year 2, Julio and Milania each received distributions of $25,000 from Falcons Corporation.
Falcons Corporation (an S Corporation)
Income Statement
December 31, Year 1 and Year 2
Year 2
Year 1
$ 300,000
Sales revenue
$430,000
Cost of goods sold
(40,000)
(60,000)
Salary to owners Julio and Milania
(40,000)
(80,000)
Employee wages
(25,000) (50,000)
Depreciation expense
(20,000) (40,000)
Section 179 expense
(30,000) (50,000)
Interest income (related to
12,000
22,500
business)
1,500
4,000
Municipal bond income
Government fines
0
(2,000)
$ 158,500
$ 174,500
Overall net income
Distributions
$ 30,000
$ 50,000
a. What amount of ordinary income and separately stated items are allocated to them for year 2 based on the information above?
Assume that Falcons Corporation has $200,000 of qualified property (unadjusted basis).
Amount
Julio
Milania
Ordinary Income
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