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 2017 under both the daily allocation and the specific identification allocation method? Refer to the following table for the timing of SleepEZs income.
| Period | Income | |
| January 1 through March 1 (60 days) | $ | 125,000 |
| March 2 through December 31 (305 days) | 350,000 | |
| January 1 through December 31, 2017 (365 days) | $ | 475,000 |
|
a. There are no sales of SleepEZ stock during the year. b. On March 1, 2017, Blinkin sells his shares to Nod. | ||
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Principles Of Auditing: An International Perspective
Authors: Rick Stephan Hayes, Philip Wallage, Arnold Schilder, Roger Dassen
1st Edition
0077095324, 978-0077095321
