Supplies expenses and utilities expense would be

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: ion that passes through to the shareholder. CPA-04728 Type1 M/C A-D Corr Ans: D PM#15 R 3-02 90. CPA-04728 Released 2005 Page 48 Boles Corp., an accrual-basis calendar-year S corporation, has been an S corporation since its inception and is not subject to the uniform capitalization rules. In the current year, Boles recorded the following: Gross receipts Dividend income from investments Supplies expense Utilities expense $50,000 5,000 2,000 1,500 What amount of net business income should Boles report on its 2003 Form 1120S, U.S. Income Tax Return for an S corporation, Schedule K? a. b. c. d. $53,500 $53,000 $48,000 $46,500 CPA-04728 Explanation Choice "d" is correct. An S corporation reports both separately stated and non-separately stated (net business) items of income. The dividend income is a separately stated item and is not included in the calculation of net business income. Therefore, net business income is calculated as follows: Gross Receipts Supplies Expense Utilities Expense Net business income $50,000...
View Full Document

Ask a homework question - tutors are online