PROBLEMS 24. LO.5, 6 A calendar year S corporation’s

PROBLEMS
24. LO.5, 6 A calendar year S corporation’s profit and loss statement shows net profits of $90,000 (book income). The corporation is owned equally by three shareholders. From supplemental data, you obtain the following information about items included in the book income.
Tax-exempt interest income
$ 2,000
Dividends received
9,000
§ 1231 gain
6,000
Depreciation recapture income
12,000
Recovery of bad debts
4,000
Short-term capital loss
(6,000)
Salary to owners (each)
(10,000)
Cost of goods sold
(95,000)
Administrative expenses
(4,500)
Selling expenses
(21,200)
Distribution to shareholders
(6,000)
a. Compute the entity’s nonseparately computed income or loss.
b. What would be the portion of taxable income or loss for Chang, one of the shareholders?
25. LO.5, 6 Saul, Inc., a calendar year S corporation, incurred the following items.
Tax-exempt interest income
$ 7,000
Sales
130,000
Depreciation recapture income
12,000
Short-term capital gain
30,000
§1231 gain
12,000
Cost of goods sold
(42,000)
Administrative expenses
(15,000)
Depreciation expense
(17,000)
Charitable contributions
(14,000)
a. Calculate Saul’s nonseparately computed income or loss.
b. If Maynor is a 40% owner, what is his share of the short-term capital gain?
26. LO.5, 6 Who, Inc., is a calendar year S corporation. Who’s book income this year totals $172,000. Who is owned equally by four shareholders. From supplemental data, you obtain the following information about items included in book income.
Tax-exempt interest income
$ 3,200
Dividends received
9,000
§ 1231 gain
6,000
Depreciation recapture income
13,270
Recovery of bad debts
4,000
Short-term capital loss
(8,000)
Salary to owners (each)
(11,000)
Cost of goods sold
(110,000)
Selling expenses
(26,100)
Distribution to shareholders
(12,600)
a. Compute Who’s nonseparately computed income or loss.
b. How much ordinary income or loss is reported by Sally, one of Who’s shareholders?
c. How much dividend income is reported on Sally’s Schedule K-1?
(Jr. 12-38-12-39)
Jr., William H. Hoffman,, William A. Raabe, James E. Smith, David M. Maloney. South-Western Federal Taxation 2013: Corporations, Partnerships, Estates and Trusts, 36th Edition. South-Western, 2016-04-11. .
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