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 received distributions of $20,000 and $10,000, respectively, 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.

Transcribed Image Text:

Falcons Corporation (an S corporation) Income Statement December 31, year l Year 1 Year 2 Sales Revenue $300,000 $430,000 Cost of Goods Sold Salary to owners Julio and Milania Employee Wages Depreciation Expens,e Section 179 Expense Interest income Municipal Bond Income Government Fines Overall Net Income Distributions (40,000) (40,000) (25,000) (20,000) (30,000) 12,000 1,500 (60,000) (80,000) (50,000) (40,000) (50,000) 22,500 4,000 (2,000 S158.500 S30,000 S174500 S50,000