Question
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 1 | Year 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 income | 2,000 | 2,500 |
Dividend income | 500 | 1,000 |
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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