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)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
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](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F74f94cc8-bc64-4b9b-951f-c81c73878c6f%2F207d1fa5-73f6-49a4-8609-58a9d21bb94f%2F9l7uq6_processed.png&w=3840&q=75)
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

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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