Julio and Milania are owners of Falcons Corporation, an S corporation. Each owns 50 percent of Falcons Corporation. In year 1, Julio and Milania each received distributions of $15,000 from Falcons Corporation. Falcons Corporation (an S Corporation) Income Statement December 31, Year 1 and Year 2 Year 1 Year 2 Sales revenue Cost of goods sold Salary to owners Julio and Milania Employee wages $ 305,000 (43,000) $ 435,000 (63,000) (40,000) (80,000) (25,000) (50,000) Depreciation expense Section 179 expense Interest income (related to business income) Municipal bond income. (15,000) (30,000) (30,000) (50,000) 12,000 Government fines Overall net income Distributions 1,600 0 $ 165,600 $ 30,000 22,500 4,200 (2,000) $ 186,700 $ 50,000 c. Complete Julio's 1120-S, Schedule K-1, for year 1. (Use 2021 tax rules regardless of year on tax form. Input all values as positive numbers.) Falcons Corporation EIN: 58-1111111 Shareholder's identifying number: 111-11-1111 Prepare Form 1120-s. Schedule K1 Schedule K-1 for Form 1120-S. Schedule K-1 2020 (Form 1120-S) Department of the Treasury For calendar year 2020, or tax year Internal Revenue Service beginning ending 2020 20 2 Final K-1 Part III Amended K-1 OMB No. 1545-0123 Shareholder's Share of Current Year Income, Deductions, Credits, and Other Items Ordinary business income (loss) 13 Credits Net rental real estate income (loss) Shareholder's Share of Income, Deductions, Credits, etc. See back of form and separate instructions. Part I Information About the Corporation A Corporation's employer identification number 3 Other net rental income (loss) 14 Foreign transactions 4 Interest income equired information C IRS Center where corporation filed retum 6 Royalties 7 Net short-term capital gain (loss) Part II Information About the Shareholder D Shareholder's identifying number E Shareholder's name, address, city, state, and ZIP code F Current year allocation percentage G Shareholder's number of shares Beginning of tax year End of tax year H Loans from shareholder Beginning of tax year End of tax year For IRS Use Only % Net long-term capital gain (loss) Bb Collectibles (28%) gain (loss) Alternative minimum tax 15 (AMT) items Unrecaptured section 1250 gain 9 Net section 1231 gain (loss) 10 Other income (loss) Items affecting shareholder 16 basis 11 Section 179 deduction 12 Other deductions 17 Other information STMT 18 19 More than one activity for at-risk purposes" More than one activity for passive activity purposes *See attached statement for additional information. For Paperwork Reduction Act Notice, see Instructions for Form 1065. www.irs.gov/Form1065 Cat. No. 11394R Schedule K-1 (Form 1065) 2020 THIS FORM IS A SIMULATION OF AN OFFICIAL U.S. TAX FORM. IT IS NOT THE OFFICIAL FORM ITSELF. DO NOT USE THIS FORM FOR TAX FILINGS OR FOR ANY PURPOSE OTHER THAN EDUCATIONAL 2021 McGraw-Hill Education