how would the answer change if they both recieved distributions of $15,000 from Falcon Corp.

Julio amd Milania are owners of Falcons Corp, an S Corp. They each own 50percent of Falcons Corp. In year one julio and Milania each recieved distributions of $15,000 from Falcon Corp.

A. What amount of ordinary income and separately stated items are allocated to them for year one based on the infor above?

B. Complete Falcons form 1120s, schedule K for year 1

C. Complete Julios 1120s, schedule k-1 for year one.

	Year 1	year 2
Sales revenue	300,000	430,000
Cost of goods sold	(40,000)	(60,000)
Salary to owners	(40,000)	(80,000)
Employee wages	(25,000)	(50,000)
Depreciation expense	(20,000)	(40,000)
Section 179 expense	(30,000)	(50,000)
Interest expense	12,000	22,500
Municipal bomd expense	1,500	4,000
Government fines	0	(2,000)
Overall net income	158,000	174,500
Distributions	30,000	50,000

Answer rating: 100% (QA)

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