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 Sales revenue Cost of goods sold Salary to owners Julio and Milania Employee wages Depreciation expense Section 179 expense Interest income (related to business) Municipal bond income Government fines Overall net income Distributions Year 1 $ 300,000 (40,000) (40,000) (25,000) (60,000) (80,000) (50,000) (20,000) (40,000) (30,000) (50,000) 22,500 4,000 (2,000) $ 174,500 $ 50,000 12,000 1,500 0 Year 2 $430,000 $ 158,500 $ 30,000 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).
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 Sales revenue Cost of goods sold Salary to owners Julio and Milania Employee wages Depreciation expense Section 179 expense Interest income (related to business) Municipal bond income Government fines Overall net income Distributions Year 1 $ 300,000 (40,000) (40,000) (25,000) (60,000) (80,000) (50,000) (20,000) (40,000) (30,000) (50,000) 22,500 4,000 (2,000) $ 174,500 $ 50,000 12,000 1,500 0 Year 2 $430,000 $ 158,500 $ 30,000 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).
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Subject: acounting
![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.
Sales revenue
Cost of goods sold
Salary to owners Julio and Milania
Employee wages
Falcons Corporation (an S Corporation)
Income Statement
December 31, Year 1 and Year 2
Depreciation expense
Section 179 expense
Interest income (related to
business)
Municipal bond income
Government fines
Overall net income
Distributions
Ordinary Income
Year 1
$ 300,000
(40,000)
(40,000)
Year 2
$430,000
(60,000)
(80,000)
(25,000)
(50,000)
(20,000) (40,000)
(30,000) (50,000)
12,000
22,500
1,500
0
4,000
(2,000)
Amount
$ 158,500
$ 30,000
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).
$ 174,500
$ 50,000
Julio
Milania](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fc7fe5a73-45e4-4166-8ba1-50e355550dfc%2F0a11a117-9e32-443c-9154-3df95cc329dc%2Fap4dpie_processed.png&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.
Sales revenue
Cost of goods sold
Salary to owners Julio and Milania
Employee wages
Falcons Corporation (an S Corporation)
Income Statement
December 31, Year 1 and Year 2
Depreciation expense
Section 179 expense
Interest income (related to
business)
Municipal bond income
Government fines
Overall net income
Distributions
Ordinary Income
Year 1
$ 300,000
(40,000)
(40,000)
Year 2
$430,000
(60,000)
(80,000)
(25,000)
(50,000)
(20,000) (40,000)
(30,000) (50,000)
12,000
22,500
1,500
0
4,000
(2,000)
Amount
$ 158,500
$ 30,000
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).
$ 174,500
$ 50,000
Julio
Milania
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education