Supplies expenses and utilities expense would be

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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...
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This note was uploaded on 06/14/2013 for the course ACCOUNTING Regulation taught by Professor Becker during the Fall '10 term at Keller Graduate School of Management.

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