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Sales revenue Falcons Corporation (an S Corporation) Income Statement December 31, Year 1 and Year 2 Year 1 $ 335,000 Year 2 $ 465,000 Cost of goods sold (42,000) (65,000) Salary to owners Julio and Milania (40,000) (80,000) Employee wages (30,000) (60,000) Depreciation expense (20,000) (40,000) Section 179 expense (30,000) (50,000) Interest income (related to business income) 10,000 18,500 Municipal bond income 1,700 Government fines 0 4,400 (3,000)

Sales revenue Falcons Corporation (an S Corporation) Income Statement December 31, Year 1 and Year 2 Year 1 $ 335,000 Year 2 $ 465,000 Cost of goods sold (42,000) (65,000) Salary to owners Julio and Milania (40,000) (80,000) Employee wages (30,000) (60,000) Depreciation expense (20,000) (40,000) Section 179 expense (30,000) (50,000) Interest income (related to business income) 10,000 18,500 Municipal bond income 1,700 Government fines 0 4,400 (3,000)

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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I need help calculating Allocated Wages

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! Required information [The following information applies to the questions displayed below.] 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. Sales revenue Cost of goods sold Falcons Corporation (an S Corporation) Income Statement December 31, Year 1 and Year 2 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 $ 335,000 (42,000) Year 2 $ 465,000 (65,000) (40,000) (80,000) (30,000) (60,000) (20,000) (40,000) (30,000) (50,000) 10,000 1,700 0 $ 184,700 $ 20,000 18,500 4,400 (3,000) $ 189,900 $ 50,000
Transcribed Image Text:! Required information [The following information applies to the questions displayed below.] 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. Sales revenue Cost of goods sold Falcons Corporation (an S Corporation) Income Statement December 31, Year 1 and Year 2 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 $ 335,000 (42,000) Year 2 $ 465,000 (65,000) (40,000) (80,000) (30,000) (60,000) (20,000) (40,000) (30,000) (50,000) 10,000 1,700 0 $ 184,700 $ 20,000 18,500 4,400 (3,000) $ 189,900 $ 50,000
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 $230,000 of qualified property (unadjusted basis). Ordinary Income Section 179 expense Qualified business income Municipal bond income Distributions × Answer is not complete. Amount Allocated to Allocated to Julio Milania $ 106,500 $ 106,500 $ 213,000 30,000 213,000 15,000 106,500 15,000 106,500 1,700 850 850 $ 20,000 $ 10,000 $ 10,000 Allocated wages Unadjusted basis of qualified property $ 230,000 $ 115,000 $ 115,000
Transcribed Image Text: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 $230,000 of qualified property (unadjusted basis). Ordinary Income Section 179 expense Qualified business income Municipal bond income Distributions × Answer is not complete. Amount Allocated to Allocated to Julio Milania $ 106,500 $ 106,500 $ 213,000 30,000 213,000 15,000 106,500 15,000 106,500 1,700 850 850 $ 20,000 $ 10,000 $ 10,000 Allocated wages Unadjusted basis of qualified property $ 230,000 $ 115,000 $ 115,000
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