I need help with (Allocated wages) Jack and Jill are owners of UpAHill, an S Corporation. They own 25 and 75 percent, respectively.UpAHill Corporation (an S Corporation)Income StatementDecember 31, Year 1 and Year 2Year 1Year 2$ 175,000(60,000)(40,000)(15,000)(10,000)(7,500)2,000$ 310,000(85,000)(50,000)(20,000)(15,000)(9,000)2,500Sales revenueCost of goods soldSalary to owners Jack and JillEmployee wagesDepreciation expenseMiscellaneous expensesInterest income (related to business)Qualified dividend income5001,000$ 134,500Overall net income$ 45,000a. What amount of ordinary income and separately stated items are allocated to them for years 1 and 2 based on the informationabove? Assume that UpAHill Corporation has $100,000 of qualified property (unadjusted basis) in both years.JackJillYear 1Year 2Year 1Year 2Ordinary income$11,125 $33,37533,375 $100,125Qualified business income$11,125 $33,37533,375 $100,125Dividend income$125 $250$375 $750Allocated wagesUnadjusted basis of qualified property$25,000 $25,000 $75,000 $75,000%24%24%24

Answered: Year Year 2 $ 175,000 (60,000) (…

FINANCIAL ACCOUNTING

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ISBN:9781259964947

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Chapter1: Financial Statements And Business Decisions

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I need help with (Allocated wages)

Jack and Jill are owners of UpAHill, an S Corporation. They own 25 and 75 percent, respectively.
UpAHill Corporation (an S Corporation)
Income Statement
December 31, Year 1 and Year 2
Year 1
Year 2
$ 175,000
(60,000)
(40,000)
(15,000)
(10,000)
(7,500)
2,000
$ 310,000
(85,000)
(50,000)
(20,000)
(15,000)
(9,000)
2,500
Sales revenue
Cost of goods sold
Salary to owners Jack and Jill
Employee wages
Depreciation expense
Miscellaneous expenses
Interest income (related to business)
Qualified dividend income
500
1,000
$ 134,500
Overall net income
$ 45,000
a. What amount of ordinary income and separately stated items are allocated to them for years 1 and 2 based on the information
above? Assume that UpAHill Corporation has $100,000 of qualified property (unadjusted basis) in both years.
Jack
Jill
Year 1
Year 2
Year 1
Year 2
Ordinary income
$
11,125 $
33,375
33,375 $
100,125
Qualified business income
$
11,125 $
33,375
33,375 $
100,125
Dividend income
$
125 $
250
$
375 $
750
Allocated wages
Unadjusted basis of qualified property
$
25,000 $
25,000 $
75,000 $
75,000
%24
%24
%24

Expert Solution

Step 1

Jack and Jill are owners of Up A Hill, an S corporation.

Jack has = 25%

Jill = 75%

	Jack		Jill
	Year-1	Year-2	Year-1	Year-2
Ordinary Income	$11,125	$33,375	$33,375	$100,125
Qualified Business income	$11,125	$33,375	$33,375	$100,125
Dividend income	$125	$250	$375	$750
Allocated wages	$3,750	$5,000	$11,250	$15,000
Unadjusted basis of qualified property	$25,000	$25,000	$75,000	$75,000

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