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equired information [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. \table[[\table[[Falcons Corporation (an S Corporati],[Income Statement],[December 31 , Year 1 and Year 2]],Year 1,Year 2],[\table[[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)],[Municipal bond income],[Government fines]],\table[[305,000],[(43,000)

equired information [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. \table[[\table[[Falcons Corporation (an S Corporati],[Income Statement],[December 31 , Year 1 and Year 2]],Year 1,Year 2],[\table[[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)],[Municipal bond income],[Government fines]],\table[[305,000],[(43,000)

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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. Each owns 50 percent of Falcons Corporation. In year 1, Julio and Milania each received distributions of $14,000 from Falcons Corporation. \table[[\table[[Falcons Corporation (an S Corporati],[Income Statement],[December 31 , Year 1 and Year 2]],Year 1,Year 2],[\table[[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)],[Municipal bond income],[Government fines]],\table[[305,000],[(43,000)
 
Required information [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 Sales revenue Year 1 $ 305,000 Year 2 Cost of goods sold Salary to owners Julio and Milania Employee wages (43,000) $ 435,000 (63,000) (40,000) (80,000) (25,000) 50,000) Depreciation expense Section 179 expense Interest income (related to business income) Municipal bond income (15,000) (30,000) (30,000) (50,000) 10,000 Government fines Overall net income Distributions 1,300 0 $ 163,300 18,500 3,600 (2,000) $ 182,100 $ 28,000 $ 50,000 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 $200,000 of qualified property (unadjusted basis). Ordinary Income Distributions Municipal bond income Qualified business income Section 179 expense Allocated wages Unadjusted basis of qualified property Amount Allocated to Allocated to Julio Milania
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. 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 Sales revenue Year 1 $ 305,000 Year 2 Cost of goods sold Salary to owners Julio and Milania Employee wages (43,000) $ 435,000 (63,000) (40,000) (80,000) (25,000) 50,000) Depreciation expense Section 179 expense Interest income (related to business income) Municipal bond income (15,000) (30,000) (30,000) (50,000) 10,000 Government fines Overall net income Distributions 1,300 0 $ 163,300 18,500 3,600 (2,000) $ 182,100 $ 28,000 $ 50,000 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 $200,000 of qualified property (unadjusted basis). Ordinary Income Distributions Municipal bond income Qualified business income Section 179 expense Allocated wages Unadjusted basis of qualified property Amount Allocated to Allocated to Julio Milania
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