PROBLEMS 24. LO.5, 6 A calendar year S corporation’s profit and loss statement shows net profits of $90,000 (book income). The corporation is owned equally by three shareholders. From supplemental data, you obtain the following information about items included in the book income. Tax-exempt interest income $ 2,000 Dividends received 9,000 § 1231 gain 6,000 Depreciation recapture income 12,000 Recovery of bad debts 4,000 Short-term capital loss (6,000) Salary to owners (each) (10,000) Cost of goods sold (95,000) Administrative expenses (4,500) Selling expenses (21,200) Distribution to shareholders (6,000) a. Compute the entity’s nonseparately computed income or loss. b. What would be the portion of taxable income or loss for Chang, one of the shareholders? 25. LO.5, 6 Saul, Inc., a calendar year S corporation, incurred the following items. Tax-exempt interest income $ 7,000 Sales 130,000 Depreciation recapture income 12,000 Short-term capital gain 30,000 §1231 gain 12,000 Cost of goods sold (42,000) Administrative expenses (15,000) Depreciation expense (17,000) Charitable contributions (14,000) a. Calculate Saul’s nonseparately computed income or loss. b. If Maynor is a 40% owner, what is his share of the short-term capital gain? 26. LO.5, 6 Who, Inc., is a calendar year S corporation. Who’s book income this year totals $172,000. Who is owned equally by four shareholders. From supplemental data, you obtain the following information about items included in book income. Tax-exempt interest income $ 3,200 Dividends received 9,000 § 1231 gain 6,000 Depreciation recapture income 13,270 Recovery of bad debts 4,000 Short-term capital loss (8,000) Salary to owners (each) (11,000) Cost of goods sold (110,000) Selling expenses (26,100) Distribution to shareholders (12,600) a. Compute Who’s nonseparately computed income or loss. b. How much ordinary income or loss is reported by Sally, one of Who’s shareholders? c. How much dividend income is reported on Sally’s Schedule K-1? (Jr. 12-38-12-39) Jr., William H. Hoffman,, William A. Raabe, James E. Smith, David M. Maloney. SouthWestern Federal Taxation 2013: Corporations, Partnerships, Estates and Trusts, 36th Edition. South-Western, 2016-04-11.