Jack and Jill are owners of UpAHill, an S Corporation. They own 25 and 75 percent, respectively.UpAHill Corporation (an S Corporation)Income StatementDecember 31, Year 1 and Year 2Sales revenueCost of goods soldSalary to owners Jack and JillEmployee wagesDepreciation expenseMiscellaneous expenses.Interest income (related to business)Qualified dividend incomeOverall net incomeOrdinary incomeAllocated wagesUnadjusted basis of qualified propertyYear 1$ 175,000(60,000)(40,000)a. What amount of ordinary income and separately stated items are allocated to them for years 1 and 2 based on the informationabove? Assume that UpAHill Corporation has $100,000 of qualified property (unadjusted basis) in both years.Year 1(15,000)(10,000)(7,500)2,000500$ 45,000Year 2$ 310,000(85,000)(50,000)(20,000)(15,000)(9,000)2,5001,000$ 134,500JackYear 2Year 1JillYear 2b. Complete UpAHill's Form 1120-S, ScheduleK, for year 1. Complete Jill's Form 1120-SSchedule K for year 1.

Detailed answer below: Year 1:Ordinary Income $44,500 (includes $2,000 of interest income related to…

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 $ 175,000 (60,000) (40,000) (15,000) (10,000) (7,500) 2,000 500 $ 45,000 Year 2 $ 310,000 (85,000) (50,000) (20,000) (15,000) (9,000) 2,500 1,000 $ 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 $ 175,000 (60,000) (40,000) (15,000) (10,000) (7,500) 2,000 500 $ 45,000 Year 2 $ 310,000 (85,000) (50,000) (20,000) (15,000) (9,000) 2,500 1,000 $ 134,500

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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