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.

Answer rating: 100% (QA)

Solution b 1 Ordinary business Loss 42500 ... View the full answer