Week 6 Problem Set

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Learning Team E
1/30/2012
University of Phoenix
ACC 547:
James Enney

22-50

Jack and Jill are owners of UpAHill, and 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?

Description| UpaHill| Jack 25%| Jill 75%|
Year 1 Income| $ 45,000.00| | |
Less:| | | |
Dividends| $ 500.00| | |
Interest Income| $ 2,000.00| | |
Ordinary business income| $ 42,500.00| $ 10,625.00| $ 31,875.00| Separately Stated Items:| | | |
Interest Income| $ 2,000.00| $ 500.00| $ 1,500.00| Dividends| $ 500.00| $ 125.00| $ 375.00| Total:| $ 45,000.00| $ 11,250.00| $ 33,750.00|

Description| UpaHill| Jack 25%| Jill 75%|
Year 2 Income| $ 134,500.00 |  |  |
Less:|  |  |  |
Dividends| $ 1,000.00 |  |  |
Interest Income| $ 2,500.00 |  |  |
Ordinary business income| $ 131,000.00 | $ 32,750.00 | $ 98,250.00 | Separately Stated Items:|  |  |  |
Interest Income| $ 2,500.00 | $ 625.00 | $ 1,875.00 | Dividends| $ 1,000.00 | $ 250.00 | $ 750.00 | Total:| $ 134,500.00 | $ 33,625.00 | $ 100,875.00 |

The amount of income for year 1 for Jack is $10,625.00 and for Jill it is $33,750.00, separate stated items are for Jack are $625.00 and for Jill it is $1,875.00. For year 2 Jack’s income is $32,750, and Jill’s income is $98,250.00. Separate stated items for Jack is $875.00 and Jill’s is $2,625.00.

a. Complete UpaHill’s Form 1120S, Schedule K, for year

b. Complete Jill’s 1120S, Schedule K-1, for year 1.

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

Description| Jack| Jill|
Initial Tax Basis| $ 24,000.00 | $ 56,000.00 |
Ordinary business income|...
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