In year 2, Julio and Milania received distributions of $20,000 and $30,000, respectively, from Falcons Corporation.
Sales revenue $ 300,000 $ 430,000
Cost of goods sold (40,000 ) (60,000 )
Salary to owners Julio and Milania (40,000 ) (80,000 )
Employee wages (25,000 ) (50,000 )
Depreciation expense (20,000 ) (40,000 )
Section 179 expense (30,000 ) (50,000 )
Interest income 12,000 22,500
Municipal bond income 1,500 4,000
Government fines 0 (2,000 )
a.Complete Falcons Form 1120S, Schedule K for year 2.
b.. Complete Milania's 1120S, Schedule K-1 for year 2.
Overall net income $ 158,500 $ 174,500
Distributions $ 30,000 $ 50,000