SS Corporation is an S Corporation. SS has always been an S corporation and has no C Corporation E & P. SS Corporation’s financial records for 2015 show the following: Gross receipts from sales $670,000 Cost of goods sold (460,000) Operating expenses (96,800) Interest on State of Tennessee Bond 2,000 Business meals and entertainment (6,240) Section 1231 loss on sale of equipment (13,500) Charitable contribution (1,500) Distribution (legal dividend) to shareholders (10,000) SS Corporation has a $140,000 balance in its accumulated adjustment account (AAA) on January 1, 2015. Mr. S owns 10 percent of the stock of SS Corporation. During the year he received a $1,000 dividend from the corporation. Required: A. Compute SS Corporation’s book (financial accounting) income. Book Income Gross Receipts from Sales $ 670,000.00 Interest from state bonds $ 2,000.00 Cost of Goods Sold $ (460,000.00) Operating Expenses $ (96,800.00) Business Meals & Entertainment $ (6,240.00) Section 1231 Loss $ (13,500.00) Charitable Contributions $ (1,500.00) Book Income $ 93,960.00
SS Corporation is an S Corporation. SS has always been an S corporation and has no C Corporation E & P. SS Corporation’s financial records for 2015 show the following: Gross receipts from sales $670,000 Cost of goods sold (460,000) Operating expenses (96,800) Interest on State of Tennessee Bond 2,000 Business meals and entertainment (6,240) Section 1231 loss on sale of equipment (13,500) Charitable contribution (1,500) Distribution (legal dividend) to shareholders (10,000) SS Corporation has a $140,000 balance in its accumulated adjustment account (AAA) on January 1, 2015. Mr. S owns 10 percent of the stock of SS Corporation. During the year he received a $1,000 dividend from the corporation. Required: A. Compute SS Corporation’s book (financial accounting) income. Book Income Gross Receipts from Sales $ 670,000.00 Interest from state bonds $ 2,000.00 Cost of Goods Sold $ (460,000.00) Operating Expenses $ (96,800.00) Business Meals & Entertainment $ (6,240.00) Section 1231 Loss $ (13,500.00) Charitable Contributions $ (1,500.00) Book Income $ 93,960.00
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
SS Corporation is an S Corporation. SS has always been an S corporation and has no C Corporation E & P. SS Corporation’s financial records for 2015 show the following:
Gross receipts from sales $670,000
Cost of goods sold (460,000)
Operating expenses (96,800)
Interest on State of Tennessee Bond 2,000
Business meals and entertainment (6,240)
Section 1231 loss on sale of equipment (13,500)
Charitable contribution (1,500)
Distribution (legal dividend) to shareholders (10,000)
SS Corporation has a $140,000 balance in its accumulated adjustment account (AAA) on January 1, 2015.
Mr. S owns 10 percent of the stock of SS Corporation. During the year he received a $1,000 dividend from the corporation.
Required:
A. Compute SS Corporation’s book (financial accounting) income.
| Book Income | |
| Gross Receipts from Sales | $ 670,000.00 |
| Interest from state bonds | $ 2,000.00 |
| Cost of Goods Sold | $ (460,000.00) |
| Operating Expenses | $ (96,800.00) |
| Business Meals & Entertainment | $ (6,240.00) |
| Section 1231 Loss | $ (13,500.00) |
| Charitable Contributions | $ (1,500.00) |
| Book Income | $ 93,960.00 |
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education