Julio and Milania are owners of Falcons Corporation, an S corporation. Each owns 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 income) Municipal bond income Government fines Overall net income Distributions Year 1 $ 300,000 Year 2 $ 430,000 (40,000) (60,000) (40,000) (80,000) (25,000) (50,000) (20,000) (40,000) (30,000) (50,000) 12,000 1,500 Ө 22,500 4,000 (2,000) $ 174,500 $ 158,500 $ 30,000 $ 50,000 Problem 22-53 Part a (Static) 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). Answer is complete but not entirely correct. Amount Julio Milania Ordinary Income $222,500 $ 111,250 $ 111,250 Section 179 expense Qualified business income Municipal bond income Nondeductible fines Distributions 50,000 25,000 25,000 222,500 111,250 111,250 4,000 2,000 2,000 2,000 1,000 1,000 Allocated wages $ 50,000 $ $ 55,000 $ 25,000 $ 25,000 37,500 $ 37,500 × Unadjusted basis of qualified property $ 200,000 $ 100,000 $ 100,000
Julio and Milania are owners of Falcons Corporation, an S corporation. Each owns 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 income) Municipal bond income Government fines Overall net income Distributions Year 1 $ 300,000 Year 2 $ 430,000 (40,000) (60,000) (40,000) (80,000) (25,000) (50,000) (20,000) (40,000) (30,000) (50,000) 12,000 1,500 Ө 22,500 4,000 (2,000) $ 174,500 $ 158,500 $ 30,000 $ 50,000 Problem 22-53 Part a (Static) 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). Answer is complete but not entirely correct. Amount Julio Milania Ordinary Income $222,500 $ 111,250 $ 111,250 Section 179 expense Qualified business income Municipal bond income Nondeductible fines Distributions 50,000 25,000 25,000 222,500 111,250 111,250 4,000 2,000 2,000 2,000 1,000 1,000 Allocated wages $ 50,000 $ $ 55,000 $ 25,000 $ 25,000 37,500 $ 37,500 × Unadjusted basis of qualified property $ 200,000 $ 100,000 $ 100,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Just need Allocated Wages
Transcribed Image Text:Julio and Milania are owners of Falcons Corporation, an S corporation. Each owns 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 income)
Municipal bond income
Government fines
Overall net income
Distributions
Year 1
$ 300,000
Year 2
$ 430,000
(40,000)
(60,000)
(40,000)
(80,000)
(25,000)
(50,000)
(20,000)
(40,000)
(30,000)
(50,000)
12,000
1,500
Ө
22,500
4,000
(2,000)
$ 174,500
$ 158,500
$ 30,000
$ 50,000
Problem 22-53 Part a (Static)
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).
Answer is complete but not entirely correct.
Amount
Julio
Milania
Ordinary Income
$222,500 $ 111,250 $ 111,250
Section 179 expense
Qualified business income
Municipal bond income
Nondeductible fines
Distributions
50,000
25,000
25,000
222,500
111,250
111,250
4,000
2,000
2,000
2,000
1,000
1,000
Allocated wages
$ 50,000 $
$ 55,000 $
25,000 $
25,000
37,500
$
37,500 ×
Unadjusted basis of qualified property
$ 200,000 $
100,000
$
100,000
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