Vaters Corporation is an $ corporation with two equal shareholders, Mia Jones and David Kerns. This year, Waters recorded the following items of income and expense Sales revenue Interest income Long-term capital gain Cost of goods sold Salary and wages Other operating expenses $ 500,000 6,000 10,000 (250,000) (75,000) (55,000) Waters distributed $25,000 to each of its shareholders during the year. Calculate the 5 corporation's ordinary (non-separately stated) income and indicate which items must be separately stated.
Vaters Corporation is an $ corporation with two equal shareholders, Mia Jones and David Kerns. This year, Waters recorded the following items of income and expense Sales revenue Interest income Long-term capital gain Cost of goods sold Salary and wages Other operating expenses $ 500,000 6,000 10,000 (250,000) (75,000) (55,000) Waters distributed $25,000 to each of its shareholders during the year. Calculate the 5 corporation's ordinary (non-separately stated) income and indicate which items must be separately stated.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Waters Corporation is an S corporation with two equal shareholders, Mia Jones and David Kerns. This year, Waters recorded the following items of income and expense:
Sales revenue
Interest income
Long-term capital gain
Cost of goods sold
Salary and wages
Other operating expenses
Multiple choice
500,000
6,000
10,000
Waters distributed $25,000 to each of its shareholders during the year. Calculate the 5 corporation's ordinary (non separately stated) income and indicate which items must be
separately stated.
O
(250,000)
(75,000)
(55,000)
Ordinary income $126.000 tong term capital gain is separately stated
Ordinary income, $120.000, interest income and long-term caphal gain are separately stated
Ordinary income, $136.000 nothing is separately stated
Ordinary income, $195.000, Interest income, long-term cepital gain, and salary costs are separately stated
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