calculate the total federal income taxes if ACE continued to operate as an S corporation for 2018. To calculate the total federal income taxes under the scenario, youll need to complete the following:

• Determine the amount of ordinary income and any separately stated items that will flow through to the owners from the operations of the S corporation.

ACE ected Balance Sheet 12/31/2018 Assets Liabilities and Stockholder's Equit 130,000 Cash Accounts Receivable, net Unbilled Prepaid expenses Accounts Payable Accrued Liabilities Accrued distributions Billings in excess S 320,000 S 250,000 S 290,000 1,200,000 150,000 100 TOTAL CURRENT TOTAL CURRENT 1,580,000 40,000 100,000 60,000 30,000 230,000 160,000 Deferred rent Equipment Motor Vehicles Furniture and Fixtures S 20,000 TOTAL LIABILITIES 1,080,000 TOTAL Less: Accumulated Depreciation Common stock Additional Paid in Capital Retained Earnings S 20,000 S 380,000 Net Property, Plant & Equipment 70,000 TOTAL STOCKHOLDERS' EQUITY S 570,000 TOTAL ASSETS 1,650,000 TOTAL S 1,650,000 Geller Engineering, Inc Income Statement Projected--Year ended 12-31-2018 ADDITIONAL NOTES TO FINANCIAL STATEMENTS Net sales COGS Gross profit 20,800,000 17,200,000 3,600,000 Included in Selling, General, & Administrative Monica s 200,000 BilbaliE $ 37,000 93,000 Selling, General, & Administrative Expenses2,650000 Other Net operating income l salaries 330.000 950,000 Other Items Bank account interest Gain from asset sale Total other income assume book basis tax basis 20,000 70,000 90,000 assume no significant Schedule M items Gain is from the sale of equipment. All $70,000 is characterized as Sec 1245 gain for tax purposes. NET INCOME All Property, plant & equipment was purchased in the first year of operations and is carried at its historical cost