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Employee wages $15,000Income from rental real estate $20,000Charitable contributions $500Cost of goods sold $10,000Income from chair sales $75,000A. $65,000B. $69,500C. $50,000D. $30,000Rationale:Do not include items stated separately to shareholders when calculating ordinary income (loss) for thebusiness. Rental activity income and charitable contributions are separately stated on the K-1. Ordinaryincome = $50,000 ($75,000 - $15,000 - $10,000).Correct Answer:C56BusinessSection 2: BusinessFinancial InformationBusiness expensesdeductions andcreditsDC07/20/2012Subject:Reporting requirements for company employees (W-2, W-4, Form 1099)
7/20/12Completed on 07/20/2012 with a score of <b>20%</b> including 20 Correct and 80 Incorrect32/58about:blankFFA EA Book Reference:CH 10 Business EntitiesQuestion:Milton Manning, an experienced tile setter, orally agreed with NOP Company to perform full-time servicesat construction sites. He uses his own tools and performs services in the order designated by NOP andaccording to its specifications. NOP supplies all materials, makes frequent inspections of his work, payshim on a piecework basis, and carries workers\' compensation insurance on him. He does not have a placeof business or hold himself out to perform similar services for others. Either party can end the services atany time. What is the employment status for Milton Manning?57BusinessSection 3: SpecializedReturns and TaxPayersTrust and estateincome taxAD07/20/2012Subject:Distributable net incomeFFA EA Book Reference:CH 16 Specialized ReturnsQuestion:Bill Johnson\'s will provided that $10,000 a year would be paid to his widow and $5,000 a year to his sonout of the estate\'s income. There were no charitable contributions made. If the estate\'s distributable netincome for the year was $12,000, how much of the distribution is taxable to Bill\'s son?
7/20/12Completed on 07/20/2012 with a score of <b>20%</b> including 20 Correct and 80 Incorrect33/58about:blank58BusinessSection 3: SpecializedReturns and TaxPayersTrust and estateincome taxBB07/20/2012