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Jack and Jill are owners of UPAHill, an S Corporation. They own 25 and 75 percent, respectively. UPAHill Corporation (an S Corporation) Income Statement December 31, Year 1 and Year 2 sales revenue Cost of goods sold salary to owners Jack and Jill Employee wages Depreciation expense Miscellaneous expenses Interest income (related to business) Qualified dividend income Overall net income Year 1 Year 2 $175,000 $310,000 (60,000) (85,000) (40,000) (50,000) (15,000) (20,000) (10,000) (15,000) (7,500) (9,000) 2,000 2,500 500 1,000 $ 45,000 $ 134,500 What amount of ordinary Income and separately stated items are allocated to them for years 1 and 2 based on the Information bove? Assume that UpAHill Corporation has $100,000 of qualified property (unadjusted basis) in both years. Ordinary income Dividend income Jack Jill Year 1 Year 2 Year 1 Year 2 Qualified business income Allocated wages Unadjusted basis of qualified property Assume Jack and Jill, 25 and 75 percent shareholders, respectively, in UPAHill Corporation, have tax bases in their shares at the beginning of year 1 of $24,000 and $56,000, respectively. Also, assume no distributions were made. Given the Income statement below, what are their tax bases in their shares at the end of year 1? UPAHill Corporation (an S Corporation) Income Statement December 31, Year 1 and Year 2 sales revenue Cost of goods sold salary to owners Jack and Jill Employee wages Depreciation expense Miscellaneous expenses Interest income (related to business) Qualified dividend income Overall net income Jack Jill Tax Basis at the end of Year 1 Year 1 $175,000 (60,000) Year 2 $310,000 (85,000) (40,000) (50,000) (15,000) (20,000) (10,000) (15,000) (7,500) 2,000 500 (9,000) 2,500 1,000 $ 45,000 $ 134,500

Jack and Jill are owners of UPAHill, an S Corporation. They own 25 and 75 percent, respectively. UPAHill Corporation (an S Corporation) Income Statement December 31, Year 1 and Year 2 sales revenue Cost of goods sold salary to owners Jack and Jill Employee wages Depreciation expense Miscellaneous expenses Interest income (related to business) Qualified dividend income Overall net income Year 1 Year 2 $175,000 $310,000 (60,000) (85,000) (40,000) (50,000) (15,000) (20,000) (10,000) (15,000) (7,500) (9,000) 2,000 2,500 500 1,000 $ 45,000 $ 134,500 What amount of ordinary Income and separately stated items are allocated to them for years 1 and 2 based on the Information bove? Assume that UpAHill Corporation has $100,000 of qualified property (unadjusted basis) in both years. Ordinary income Dividend income Jack Jill Year 1 Year 2 Year 1 Year 2 Qualified business income Allocated wages Unadjusted basis of qualified property Assume Jack and Jill, 25 and 75 percent shareholders, respectively, in UPAHill Corporation, have tax bases in their shares at the beginning of year 1 of $24,000 and $56,000, respectively. Also, assume no distributions were made. Given the Income statement below, what are their tax bases in their shares at the end of year 1? UPAHill Corporation (an S Corporation) Income Statement December 31, Year 1 and Year 2 sales revenue Cost of goods sold salary to owners Jack and Jill Employee wages Depreciation expense Miscellaneous expenses Interest income (related to business) Qualified dividend income Overall net income Jack Jill Tax Basis at the end of Year 1 Year 1 $175,000 (60,000) Year 2 $310,000 (85,000) (40,000) (50,000) (15,000) (20,000) (10,000) (15,000) (7,500) 2,000 500 (9,000) 2,500 1,000 $ 45,000 $ 134,500

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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Jack and Jill are owners of UPAHill, an S Corporation. They own 25 and 75 percent, respectively. UPAHill Corporation (an S Corporation) Income Statement December 31, Year 1 and Year 2 Sales revenue Cost of goods sold salary to owners Jack and Jill Employee wages Depreciation expense Miscellaneous expenses Interest income (related to business) Qualified dividend income Overall net income Year 1. Year 2 (60,000) $175,000 $310,000 (85,000) (40,000) (50,000) (15,000) (20,000) (10,000) (15,000) (7,500) (9,000) 2,000 2,500 500 1,000 $ 45,000 $ 134,500 a. What amount of ordinary Income and separately stated items are allocated to them for years 1 and 2 based on the Information above? Assume that UpAHill Corporation has $100,000 of qualified property (unadjusted basis) in both years. Ordinary income Dividend income Jack Jill Year 1 Year 2 Year 1 Year 2 Qualified business income Allocated wages Unadjusted basis of qualified property Assume Jack and Jill, 25 and 75 percent shareholders, respectively, in UpAHill Corporation, have tax bases in their shares at the beginning of year 1 of $24,000 and $56,000, respectively. Also, assume no distributions were made. Given the income statement below, what are their tax bases in their shares at the end of year 1? UPAHill Corporation (an s Corporation) Income Statement December 31, Year 1 and Year 2 Sales revenue Cost of goods sold Salary to owners Jack and Jill Employee wages Depreciation expense Miscellaneous expenses Interest income (related to business) Qualified dividend income Overall net income Year 1 $175,000 Year 2 $310,000 (60,000) (85,000) (40,000) (50,000) (15,000) (20,000) (10,000) (15,000) (7,500) (9,000) 2,000 2,500 500 1,000 $ 45,000 $134,500 Jack Jill Tax Basis at the end of Year 1
Transcribed Image Text:Jack and Jill are owners of UPAHill, an S Corporation. They own 25 and 75 percent, respectively. UPAHill Corporation (an S Corporation) Income Statement December 31, Year 1 and Year 2 Sales revenue Cost of goods sold salary to owners Jack and Jill Employee wages Depreciation expense Miscellaneous expenses Interest income (related to business) Qualified dividend income Overall net income Year 1. Year 2 (60,000) $175,000 $310,000 (85,000) (40,000) (50,000) (15,000) (20,000) (10,000) (15,000) (7,500) (9,000) 2,000 2,500 500 1,000 $ 45,000 $ 134,500 a. What amount of ordinary Income and separately stated items are allocated to them for years 1 and 2 based on the Information above? Assume that UpAHill Corporation has $100,000 of qualified property (unadjusted basis) in both years. Ordinary income Dividend income Jack Jill Year 1 Year 2 Year 1 Year 2 Qualified business income Allocated wages Unadjusted basis of qualified property Assume Jack and Jill, 25 and 75 percent shareholders, respectively, in UpAHill Corporation, have tax bases in their shares at the beginning of year 1 of $24,000 and $56,000, respectively. Also, assume no distributions were made. Given the income statement below, what are their tax bases in their shares at the end of year 1? UPAHill Corporation (an s Corporation) Income Statement December 31, Year 1 and Year 2 Sales revenue Cost of goods sold Salary to owners Jack and Jill Employee wages Depreciation expense Miscellaneous expenses Interest income (related to business) Qualified dividend income Overall net income Year 1 $175,000 Year 2 $310,000 (60,000) (85,000) (40,000) (50,000) (15,000) (20,000) (10,000) (15,000) (7,500) (9,000) 2,000 2,500 500 1,000 $ 45,000 $134,500 Jack Jill Tax Basis at the end of Year 1
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