Bakers Inc. (an S corporation) is a retailer of gourmet snacks. The controller at Bakers has provided the income statement.

Question 1: Using the income statement provided, compute Bakers' ordinary business income (loss).

Question 2 : Using the income statement provided,

calculate the sum of Bakers' total separately stated items.

Sales 450,000

Cost of Goods Sold (150,000)

Gross Profit 300,000

Charitable Contributions 10,000

Rent Expense 24,000

Interest Expense (business related) 12,000

Officer Compensation 120,000

Depreciation (includes 50,000 Section 179 expense) 55,000 (221,000)

Operating Profit 79,000

Other income and Losses:

Long-term Capital Gain 26,000

Dividends from Domestic Stock 5,000

Section 1245 Gain on Truck Sale 10,000

Section 1231 Gain on Truck Sale 15,000 56,500

Net Income 135,500