Question - The profit and loss statement of Strategy, Inc., an S corporation, shows net profits of $101,000 (book income). The corporation has three equal shareholders. From supplemental data, you obtain the following information about some items that are included in the $101,000.
Selling expenses (19,200)
Municipal bond interest income 2,000
Dividends received on Boeing stock 8,000
§ 1231 gain 6,000
Depreciation recapture income 13,000
Passive income 3,000
Short-term capital loss (9,000)
Salary paid to owners (each) (11,000)
Cost of goods sold (81,000)
a. Determine the non-separately computed income or loss.
b. What is the portion of ordinary income or loss for Zariat, one of the three shareholders?