3-36 Tax Treatment of Various Entities. Office Supplies Unlimited is a small office sup- ply outlet. The results of its operations for the most recent year are summarized as follows: Gross profit on sales $95,000 Cash operating expenses .... 43,000 Depreciation expense. 16,500 Compensation to owner(s) 20,000 Distribution of profit to owner(s) .. 5,000 In each of the following situations, determine how much income is to be taxed (i.e., to be included along with any other income in calculating taxable income) to each of the taxpayers involved a. The business is a sole proprietorship owned by T. b. The business is a partnership owned by R and S with an agreement to share all items equally. S is guaranteed a salary of $20,000 (sce above). c. The business is a corporation owned equally by U and K. K is employed by the business and receives a salary of $20,000 (see above)