Jack and Jill are owners of UpAHill, an S corporation. They own 25 and 75 percent, respectively.

UpAHill Corporation (an S corporation)
Income Statement
December 31, Year 1 and Year 2
	Year 1				Year 2
Sales revenue	$	175,000			$	310,000
Cost of goods sold		(60,000	)			(85,000	)
Salary to owners Jack and Jill		(40,000	)			(50,000	)
Employee wages		(15,000	)			(20,000	)
Depreciation expense		(10,000	)			(15,000	)
Miscellaneous expenses		(7,500	)			(9,000	)
Interest income (related to business)		2,000				2,500
Qualified dividend income		500				1,000
Overall net income	$	45,000			$	134,500

b. Complete UpAHills Form 1120S, Schedule K, for year 1.

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