The profit and loss statement of Kitsch Ltd., an S corporation, shows $115,000 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 ($23,000) Tax-exempt interest income 3,450 Dividends received 10,350 5 1231 gain 8,050 Depreciation recapture income 11,500 Net income from passive real estate rentals 5,750 Long-term capital loss (6,900) Salary paid to owners (each) (13,800) Cost of goods sold (103,500) a. Compute Kitsch's nonseparately stated income or loss for the tax year. The entity's nonseparately stated computed is s b. What would be the share of this year's nonseparately stated income or loss items for James Billings, one of the Kitsch shareholders?

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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Problem 15-14 (Algorithmic) (LO. 4)
The profit and loss statement of Kitsch Ltd., an S corporation, shows $115,000 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
($23,000)
Tax-exempt interest income
3,450
Dividends received
10,350
5 1231 gain
8,050
Depreciation recapture income
11,500
Net income from passive real estate rentals
5,750
Long-term capital loss
(6,900)
Salary paid to owners (each)
(13,800)
Cost of goods sold
(103,500)
a. Compute Kitsch's nonseparately stated income or loss for the tax year.
The entity's nonseparately stated computed
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?
Transcribed Image Text:Problem 15-14 (Algorithmic) (LO. 4) The profit and loss statement of Kitsch Ltd., an S corporation, shows $115,000 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 ($23,000) Tax-exempt interest income 3,450 Dividends received 10,350 5 1231 gain 8,050 Depreciation recapture income 11,500 Net income from passive real estate rentals 5,750 Long-term capital loss (6,900) Salary paid to owners (each) (13,800) Cost of goods sold (103,500) a. Compute Kitsch's nonseparately stated income or loss for the tax year. The entity's nonseparately stated computed 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?
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