Assume that Wrigley Juice is an S corporation owned equally by Henry, Iris, and Jasmine. Prepare a memo explaining the effect of Wrigley’s results on Henry’s, Iris’s, and Jasmine’s tax returns.

Wrigley Juice has the following income, expense, and loss items for the current year:

Sales ............... $850,000

Tax-exempt interest .......... 40,000

Long-term capital gain ........ 85,000

Short-term capital loss ........ 35,000

Passive activity loss .......... 20,000

Cost of goods sold ......... 480,000

Depreciation ............. 40,000

Section 179 expense .......... 50,000

Other operating expenses ....... 200,000

Net operating loss (from preceding year) . 24,000