Julio and Milania are owners of Falcons Corporation, an S corporation. They each own 50 percent of Falcons Corporation. In year 1, Julio and Milani each received distributions of $15,000 from Falcons Corporation.

a. What amount of ordinary income and separately stated items are allocated to them for year 1 based on the information above?

b. Complete Falcons Form 1120S, Schedule K for year 1.

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