! Required Information [The following Information applies to the questions displayed below.] 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. Sales revenue Cost of goods sold Falcons Corporation (an S Corporation) Income Statement December 31, Year 1 and Year 2 Salary to owners Julio and Milania Employee wages Depreciation expense Section 179 expense Interest income (related to business income) Municipal bond income Government fines Overall net income Distributions Year 1 $ 300,000 Year 2 $ 430,000 (40,000) (60,000) (40,000) (80,000) (25,000) (50,000) (20,000) (40,000) (30,000) (50,000) 12,000 1,500 $ 158,500 8 22,500 4,000 (2,000) $ 174,500 $ 30,000 $ 50,000 a. What amount of ordinary Income and separately stated items are allocated to them for year 1 based on the Information above? Assume that Falcons Corporation has $200,000 of qualified property (unadjusted basis). Ordinary Income Section 179 expense Municipal bond income Distributions Answer is not complete. Amount $ 187,000 Allocated to Julio $ 93,500 Allocated to Milania 30,000 1,500 15,000 750 93,500 15,000 750 30,000 15,000 15,000