Problem 11-49 (LO 11-3) [The following information applies to the questions displayed below.] Winkin, Blinkin, and Nod
Question:
Problem 11-49 (LO 11-3)
[The following information applies to the questions displayed below.]
Winkin, Blinkin, and Nod are equal shareholders in SleepEZ, an S corporation. In the conditions listed below, how much income should each report from SleepEZ for 2019 under both the daily allocation and the specific identification allocation method? Refer to the following table for the timing of SleepEZ's income.
PeriodIncomeJanuary 1 through March 8 (67 days)$161,000
March 9 through December 31 (298 days)418,000
January 1 through December 31, 2019 (365 days)$579,000
(Do not round intermediate calculations. Round your final answers to the nearest whole dollar amount.)
a.There are no sales of SleepEZ stock during the year.
Income ReportedDaily Allocation MethodSpecific Identification MethodWinkinBlinkinNod
b.On March 8, 2019, Blinkin sells his shares to Nod.
Income ReportedDaily Allocation MethodSpecific Identification MethodWinkinBlinkinNod
c.On March 8, 2019, Winkin and Nod each sell their shares to Blinkin.
Income ReportedDaily Allocation MethodSpecific Identification MethodWinkinNodBlinkin