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UpAHill Corporation (an S Corporation) Income Statement December 31, Year 1 and Year 2 Year 1 Year 2 Sales revenue $175,000 $310,000 Cost of goods

UpAHill Corporation (an S Corporation)
Income Statement
December 31, Year 1 and Year 2
Year 1Year 2
Sales revenue$175,000$310,000
Cost of goods sold(60,000)(85,000)
Salary to owners Jack and Jill(40,000)(50,000)
Employee wages(15,000)(20,000)
Depreciation expense(10,000)(15,000)
Miscellaneous expense(7,500)(9,000)
Interest income2,0002,500
Dividend income5001,000
Overall net income$45,000$134,500

Jack and Jill are owners of UpAHill, an S corporation. They own 25 and 75 percent, respectively.

a) What amount of ordinary income and separately stated items are allocated to them for years 1 and 2 based on the information above?

b) Complete UpAHill's Form 1120S, Schedule K, for year 1.

c) Complete Jill's 1120S, Schedule K-1, for year 1.

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