Noon, Inc., a calendar year S corporation, is equally owned by Ralph as well as Thomas. Thomas dies upon April 1 (not a leap year), and his estate chooses a March 31 fiscal year. Noon has $400,000 of income for January 1 through March 31 and $600,000 for the remainder of the year.
a. Find out how income is allocated to Ralph and Thomas under the pro rata approach.
b. Find out how income is allocated to Ralph and Thomas under the per-books method.