Problem 12-20 (Algorithmic) (LO. 5, 6) The profit and loss statement of Kitsch Ltd., an S corporation, shows $230,000 book income. Kitsch is owned equally by four shareholders. From supplemental data, you obtain the following information about items that are included in book income. Selling expenses Tax-exempt interest income Dividends received § 1231 gain Depreciation recapture income Net income from passive real estate rentals Long-term capital loss Salary paid to owners (each). Cost of goods sold a. Compute Kitsch's nonseparately stated income or loss for the tax year. The entity's nonseparately stated computed income Vis s Feedback Check My Work ($46,000) 6,900 20,700 16,100 23,000 11,500 (13,800) (27,600) (207,000) b. What would be the share of this year's nonseparately stated income or loss items for James Billings, one of the Kitsch shareholders? Feedback

Problem 12-20 (Algorithmic) (LO. 5, 6) The profit and loss statement of Kitsch Ltd., an S corporation, shows $230,000 book income. Kitsch is owned equally by four shareholders. From supplemental data, you obtain the following information about items that are included in book income. Selling expenses Tax-exempt interest income Dividends received § 1231 gain Depreciation recapture income Net income from passive real estate rentals Long-term capital loss Salary paid to owners (each). Cost of goods sold a. Compute Kitsch's nonseparately stated income or loss for the tax year. The entity's nonseparately stated computed income Vis s Feedback Check My Work ($46,000) 6,900 20,700 16,100 23,000 11,500 (13,800) (27,600) (207,000) b. What would be the share of this year's nonseparately stated income or loss items for James Billings, one of the Kitsch shareholders? Feedback

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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Concept explainers

Capital Gain

Any capital asset when sold can give the seller a higher or lower price from its purchase price leading to a capital gain or capital loss. The time period of holding an asset is decided based on if it is a long term or short-term capital gain. On that basis, the rate of taxation is decided if it is 20%, 15% or according to the tax brackets. The rate of taxation differs in the case of equity or debt, whether long or short term. The capital gain can be adjusted from capital loss to arrive at a net capital gain. The amount of gains and the exemption has to be reported in the tax return filed in the financial year in which the asset was transferred. The tax return can be filed quarterly, monthly, semi-annually or annually.

Question

Problem 12-20 (Algorithmic) (LO. 5, 6)
The profit and loss statement of Kitsch Ltd., an S corporation, shows $230,000 book income. Kitsch is owned equally by four shareholders.
From supplemental data, you obtain the following information about items that are included in book income.
Selling expenses
Tax-exempt interest income
Dividends received
§ 1231 gain
Depreciation recapture income
Net income from passive real estate rentals
Long-term capital loss
Salary paid to owners (each).
Cost of goods sold
Feedback
a. Compute Kitsch's nonseparately stated income or loss for the tax year.
The entity's nonseparately stated computed income
Check My Work
($46,000)
6,900
20,700
16,100
23,000
11,500
(13,800)
(27,600)
(207,000)
Feedback
✓is:
b. What would be the share of this year's nonseparately stated income or loss items for James Billings, one of the Kitsch shareholders?

eBook
The entity's nonseparately stated computed income
Feedback
Check My Wodk
Feedback
b. What would be the share of this year's nonseparately stated income or loss items for James Billings, one of the Kitsch shareholders?
Check My Work
c. What is James Billings' share of tax-exempt interest income, if any? Round your answer to the nearest dollar.
Is the income taxable to him this year?
Not taxable
Feedback
Print Hom
Check My Work
Feedback
Check My Work
✓ is $
Check My Work
Previous
Ne

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