Whip, Inc., is a calendar year S Corporation. Whip's book income this year totals $90,000. Whip is owned equally by three shareholders. From supplemental data, you obtain the following information about items that are included in book income.
Selling expenses ($21,200)
Tax-exempt interest 2,000
Dividends received 9,000
Ch. 1231 gain 6,000
Depreciation recapture income 12,000
Recovery of bad debts 4,000
Long-term capital loss (6,000)
Salary to owners (each) (10,000)
Cost of goods sold (95,000)
Distributions to shareholders (6,300)
a. Compute Whip's Subchapter S income or loss for 2011.
b. How much ordinary income or loss is reported by Nicole, one of Whip's shareholders?
c. How much dividend income is reported on Nicole's Schedule K-1?