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Julio and Milania are owners of Falcons Corporation, an S corporation. Each owns 50 percent of Falcons Corporatic year 1, Julio and Milania each received distributions of $10,000 from Falcons Corporation. Falcons Corporation (an s corporation) Income Statement December 31, Year 1 and Year 2 Year 1 Year 2 $ 320,000 (41,000) (40,000) (30,000) (17,000) $ 450,000 (62,000) (80,000) (60,000) (34,000) (50,000) 18,500 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 (30,000) 10,000 1,700 4,400 (2,000) $ 184,900 Government fines Overall net income $ 173,700 Distributions $ 20,000 $ 50,000 a. What amount of ordinary income and separately stated items are allocated to them for year 1 based on the information Assume that Falcons Corporation has $220,000 of qualified property (unadjusted basis). Allocated to Allocated to Amount Julio Milania Ordinary Income Section 179 expense Qualified business income Municipal bond income Distributions Allocated wages Unadjusted basis of qualified property

Julio and Milania are owners of Falcons Corporation, an S corporation. Each owns 50 percent of Falcons Corporatic year 1, Julio and Milania each received distributions of $10,000 from Falcons Corporation. Falcons Corporation (an s corporation) Income Statement December 31, Year 1 and Year 2 Year 1 Year 2 $ 320,000 (41,000) (40,000) (30,000) (17,000) $ 450,000 (62,000) (80,000) (60,000) (34,000) (50,000) 18,500 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 (30,000) 10,000 1,700 4,400 (2,000) $ 184,900 Government fines Overall net income $ 173,700 Distributions $ 20,000 $ 50,000 a. What amount of ordinary income and separately stated items are allocated to them for year 1 based on the information Assume that Falcons Corporation has $220,000 of qualified property (unadjusted basis). Allocated to Allocated to Amount Julio Milania Ordinary Income Section 179 expense Qualified business income Municipal bond income Distributions Allocated wages Unadjusted basis of qualified property

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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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 $10,000 from Falcons Corporation. Falcons Corporation (an s Corporation) Income Statement December 31, Year 1 and Year 2 Year 1 $ 320,000 (41,000) (40,000) (30,000) (17,000) (30,000) 10,000 Year 2 $ 450,000 (62,000) (80,000) (60,000) (34,000) (50,000) 18,500 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 1,700 4,400 (2,000) $ 173,700 $ 184,900 Overall net income $ 20,000 $ 50,000 Distributions 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 $220,000 of qualified property (unadjusted basis). Allocated to Julio Allocated to Amount Milania Ordinary Income Section 179 expense Qualified business income Municipal bond income Distributions Allocated wages Unadjusted basis of qualified property
Transcribed Image Text: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 $10,000 from Falcons Corporation. Falcons Corporation (an s Corporation) Income Statement December 31, Year 1 and Year 2 Year 1 $ 320,000 (41,000) (40,000) (30,000) (17,000) (30,000) 10,000 Year 2 $ 450,000 (62,000) (80,000) (60,000) (34,000) (50,000) 18,500 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 1,700 4,400 (2,000) $ 173,700 $ 184,900 Overall net income $ 20,000 $ 50,000 Distributions 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 $220,000 of qualified property (unadjusted basis). Allocated to Julio Allocated to Amount Milania Ordinary Income Section 179 expense Qualified business income Municipal bond income Distributions Allocated wages Unadjusted basis of qualified property
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The top picture was helpful for the separately stated items and I got most of the numbers on my own, but how do you calculate the QBI and allocated wages for this problem?

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