Problem 1 Cougar, Inca is a calendar year s corporation. Cougar's Form 1120s shows aen separately stated ordinary income of$80,000 for theyear.Johnny owns 40% of the Cougar stock throughout the year. The following information is obtained from the corporate records. Tax-exempt interest income 3,000 Salary paid to Johnny (52,000) Charitable contributions (6,000) Dividends received from a non-U,S, corporation 5,000 Short-term capital loss (6,000) 11,000 Depreciation recapture income Refund of prior state income taxes 5,000 Cost of goods sold (72,000) Long-term capital loss (18,000) Administrative expenses Long-term capital gain 14,000 Selling expenses (11,000) Johnny's beginning stock basis 32,000 Johnny's additional stock purchases 9,000 Beginning AAA 31,000 Johnny's loan to corporation 20,000 a. Compute Cougar's book income or loss. b. Compute Johnny's cnding stock basis. c. Calculate Cougar's ending AAA balance. Problem 2 Orange, Inc. a calendar year corporation in Clemson, South Carolina, elects S corporation status for 2014. The company generated a $74,000NOL in 2013 and anotheENOL of $43,000 in 2014. Orange recorded no other transactions for the year. At all times in 2013 and 2014 the stock of the corporation is owned by the same four shareholders each owning 25%of the stock. Pete, one of the shareholders, holds a $6.020 basis in theQgange stock at the beginningvof2014 Identif the Federal income issues that Pete faces