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 Ordinary income Interest income Dividend income 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. $ $ Is Year 1 Jack Year 1 Year 2 $ 310,000 $ 175,000 (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 10,625 X S 500 x S 125 S Year 2 32,750 625 * $ S 250 S Year 1 Jill 31,875 X S 1,500 x $ 375 S Year 2 98,250 x 1,875 750
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 Ordinary income Interest income Dividend income 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. $ $ Is Year 1 Jack Year 1 Year 2 $ 310,000 $ 175,000 (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 10,625 X S 500 x S 125 S Year 2 32,750 625 * $ S 250 S Year 1 Jill 31,875 X S 1,500 x $ 375 S Year 2 98,250 x 1,875 750
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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SOLVE COMPLETE QUESION WITH PROPER EXPLANATIONS
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
Ordinary income
Interest income
Dividend income
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.
$
S
S
Year 1
Jack
Year 1
Year 2
$ 175,000
(60,000)
$ 310,000
(85,000)
(40,000) (50,000)
(15,000) (20,000)
(10,000)
(15,000)
(7,500)
(9,000)
2,500
2,000
500
1,000
$ 45,000 $ 134,500
10,625 X S
500 X S
125 S
Year 2
32,750
625
250
Jill
Year 1
S 31,875 X S
$
1,500 × $
375 S
S
Year 2
98,250 X
1,875
750
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