Question: please explain your work methodically and in detailed way Mike, Matt, Brooke, and Kellie decide to go into business together. The form a limited liability

please explain your work methodically and in detailed way

Mike, Matt, Brooke, and Kellie decide to go into business together. The form a limited liability company and decide to elect S-Corporation. They contribute the following amounts:

Mike - 25,000

Matt - 10,000

Brooke - 10,000

Kellie - 5,000

Additionally, the operating agreement states that all profits are to be distributed by law. Mike will perform services for the company and will be paid $100,000 a year for those services. The company will be able to deduct this amount from net income.

In the first year of operations, the company had the following items of income:

Services - 160,000

Expenses - 24,000

Tax Depreciation - 28,000

Finally, Matt who withdraws $1000 to buy a Apple Watch.

What is Brooke's ending basis in the S-Corp?

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