Question
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
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 2021 under both the daily allocation and the specific identification allocation methods? Refer to the following table for the timing of SleepEZs income.
| Period | Income |
|---|---|
| January 1 through May 16 (136 days) | $ 182,000 |
| May 17 through December 31 (229 days) | 413,000 |
| January 1 through December 31, 2021 (365 days) | $ 595,000 |
a. There are no sales of SleepEZ stock during the year.
| |||||||||||||||
b. On May 16, 2021, Blinkin sells his shares to Nod.
Income Reported
Daily Allocation
MethodSpecific
Identification Method
Winkin
Blinkin
Nod
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Financial Accounting
Authors: Michael J. Jones
1st Edition
0470058986, 978-0470058985
