Required information [The following information applies to the questions displayed below.] 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 Year 1 Year 2 Sales revenue Cost of goods sold $ 175,000 (60,000) $ 310,000 (85,000) Salary to owners Jack and Jill (40,000) (50,000) Employee wages (15,000) (20,000) Depreciation expense (10,000) (15,000) Miscellaneous expenses (7,500) (9,000) Interest income (unrelated to business) Qualified dividend income 2,000 2,500 500 1,000 Overall net income $ 45,000 $ 134,500 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. Answer is complete but not entirely correct. Jack Jill Year 1 Year 2 Ordinary income $ 11,125 $ 33,375 Year 1 $ 33,375 Year 2 S 100,125 ( Qualified business income $ 10,625 $ 32,750 $ 31,875 $ 98,250 Interest income S 500 S 625 S 1,500 S 1,875 Dividend income $ 125 S 250 S 375 $ 750 Allocated wages S 3,750 $ 5,000 $ 11,250 $15,000 × Unadjusted basis of qualified property $ 25,000 $ 25,000 $ 75,000 $ 75,000
Required information [The following information applies to the questions displayed below.] 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 Year 1 Year 2 Sales revenue Cost of goods sold $ 175,000 (60,000) $ 310,000 (85,000) Salary to owners Jack and Jill (40,000) (50,000) Employee wages (15,000) (20,000) Depreciation expense (10,000) (15,000) Miscellaneous expenses (7,500) (9,000) Interest income (unrelated to business) Qualified dividend income 2,000 2,500 500 1,000 Overall net income $ 45,000 $ 134,500 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. Answer is complete but not entirely correct. Jack Jill Year 1 Year 2 Ordinary income $ 11,125 $ 33,375 Year 1 $ 33,375 Year 2 S 100,125 ( Qualified business income $ 10,625 $ 32,750 $ 31,875 $ 98,250 Interest income S 500 S 625 S 1,500 S 1,875 Dividend income $ 125 S 250 S 375 $ 750 Allocated wages S 3,750 $ 5,000 $ 11,250 $15,000 × Unadjusted basis of qualified property $ 25,000 $ 25,000 $ 75,000 $ 75,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
12
![Required information
[The following information applies to the questions displayed below.]
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
Year 1
Year 2
Sales revenue
Cost of goods sold
$ 175,000
(60,000)
$ 310,000
(85,000)
Salary to owners Jack and Jill
(40,000)
(50,000)
Employee wages
(15,000)
(20,000)
Depreciation expense
(10,000)
(15,000)
Miscellaneous expenses
(7,500)
(9,000)
Interest income (unrelated to business)
Qualified dividend income
2,000
2,500
500
1,000
Overall net income
$ 45,000
$ 134,500
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.
Answer is complete but not entirely correct.
Jack
Jill
Year 1
Year 2
Ordinary income
$ 11,125 $ 33,375
Year 1
$ 33,375
Year 2
S 100,125 (
Qualified business income
$ 10,625 $ 32,750
$ 31,875
$
98,250
Interest income
S
500
S
625 S 1,500
S
1,875
Dividend income
$
125
S
250
S 375
$
750
Allocated wages
S
3,750
$
5,000
$ 11,250
$15,000 ×
Unadjusted basis of qualified property
$ 25,000
$ 25,000
$ 75,000
$ 75,000](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F7038cbde-5259-4f1b-ade8-fa8f6320a6eb%2F603edb08-8de8-426e-9ff9-4fa6d0ab5dec%2Fcgrotoe_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Required information
[The following information applies to the questions displayed below.]
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
Year 1
Year 2
Sales revenue
Cost of goods sold
$ 175,000
(60,000)
$ 310,000
(85,000)
Salary to owners Jack and Jill
(40,000)
(50,000)
Employee wages
(15,000)
(20,000)
Depreciation expense
(10,000)
(15,000)
Miscellaneous expenses
(7,500)
(9,000)
Interest income (unrelated to business)
Qualified dividend income
2,000
2,500
500
1,000
Overall net income
$ 45,000
$ 134,500
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.
Answer is complete but not entirely correct.
Jack
Jill
Year 1
Year 2
Ordinary income
$ 11,125 $ 33,375
Year 1
$ 33,375
Year 2
S 100,125 (
Qualified business income
$ 10,625 $ 32,750
$ 31,875
$
98,250
Interest income
S
500
S
625 S 1,500
S
1,875
Dividend income
$
125
S
250
S 375
$
750
Allocated wages
S
3,750
$
5,000
$ 11,250
$15,000 ×
Unadjusted basis of qualified property
$ 25,000
$ 25,000
$ 75,000
$ 75,000
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