Eagle Corporation, an S corporation, reports the following items during 2015:
Sales.....................................................................................................................$500,000
Cost of goods sold................................................................................................150,000
Dividends—all qualified...........................................................................................7,000
Interest income on certificate of deposit held as an investment.......................2,500
Tax-exempt interest income...................................................................................1,200
Employees’ salaries (other than officers)............................................................90,000
Federal employment taxes......................................................................................6,000
Rental expense..........................................................................................................8,000
Officers’ salaries (all shareholders).......................................................................40,000
Net long-term capital gain........................................................................................8,000
Net short-term capital loss.....................................................................................10,000
Repairs........................................................................................................................2,000
MACRS depreciation................................................................................................12,000
Section 1231 losses....................................................................................................4,000
Charitable contributions...........................................................................................2,000
Amortization of organizational expenditures........................................................1,000
Research and experimentation credit.....................................................................3,500
Cash distributions to shareholders.......................................................................12,000
Calculate ordinary income (or loss) by completing page 1 of Form 1120S, and complete Schedule K (Shareholders’ Shares of Income, Credits, Deductions, etc.). Leave spaces blank on Form 1120S if information is not provided.