Instructions

Prepare a spreadsheet showing your calculation of book income (provided in the problem), taxable income, ordinary business income, and separately-stated items.

Snow & Sleet LLCs 2021 book income was $19,400, calculated as follows:

Revenues, Gains & Losses
Sales Revenue	681,800
Interest on Corporate Bond	720
Dividend Income ($2,000 of the dividend income is qualified)	2,400
Interest on State of Minnesota Bonds	900
Gain on Sale of Stock	2,000
	687,820
Expenses
Cost of Goods Sold	$ 396,000
Rent on Building & Equipment (Snow & Sleet leases all equipment used in the business and therefore owns no depreciable assets)	50,000
Bad Debt Expense	100
Property and Liability Insurance	4,400
Utilities	7,600
Supplies	5,165
Employee Salaries	70,000
Employee Benefit Plans (see discussion on amount paid to partners)	23,000
Cash Contribution to Red Cross	6,000
Business Meals - all purchased at restaurants	2,800
Business Entertainment	2,000
Fine Paid to State of Minnesota for Deception Advertising	3,000
Guaranteed Payment (Paid to Stan Sleet)	50,000
Office Expenses	7,100
Accounting Fees	3,260
Payroll Taxes	5,355
Advertising	4,700
Interest Paid on Mortgage	3,800
Organizational Expenses	6,000
Start-Up Costs	14,000
Repairs	4,140
Total Expenses	668,620
Net Income	19,400