The operating results for Peep Corporation, an S corporation, for last year were as follows:
Revenues
|
Revenues |
|
|
Gross sales |
$2,000,000 |
|
Tax exempt bond interest |
2,000 |
|
Dividend income |
8,000 |
|
Section 1231 gain (land) |
10,000 |
|
Expenses |
|
|
Cost of goods sold |
$900,000 |
|
Salaries |
600,000 |
|
Rent |
200,000 |
|
Utilities |
60,000 |
|
Depreciation |
40,000 |
|
Charitable contribution |
12,000 |
|
Section 179 expense |
20,000 |
a. Determine the corporation’s net income and its separately stated items.
b. Determine the corporation’s financial accounting income if the gain on the sale of the land is only $6,000 and depreciation is $32,000 under financial accounting rules.
c. Sample filled in forms are also in Appendix C of this text.