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The profit and loss statement of Kitsch Ltd., an S corporation, shows $100,000 book income. Kitsch is owned equally by four shareholders. From supplemental data,

The profit and loss statement of Kitsch Ltd., an S corporation, shows $100,000 book income. Kitsch is owned equally by four shareholders. From supplemental data, you obtain the following information about items that are included in book income. Selling expenses $ 21,200 Tax-exempt interest income 3,000 Dividends received 9,000 1231 gain 7,000 Depreciation recapture income 11,000 Recovery of bad debts previously deducted 5,000 Long-term capital loss (6,000) Salary paid to owners (each) (12,000) Cost of goods sold (91,000) a. Compute Kitschs non separately stated income or loss for the tax year. b. What would be the share of this years income or loss items for James Billings, one of the Kitsch shareholders

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