mush fitness inc. 1120s form service income $62,675, customer refunds ($550), in
ID: 2610307 • Letter: M
Question
mush fitness inc. 1120s form service income $62,675, customer refunds ($550), interest income $6,525, qualified dividend income $350, facility rental ($12,000) officer salary ($40,000) oter salaries ($8,000) fitness su[pplies ($750) laundry servies ($1,200) towels ($270) mats ($537), what is the ordinary income (loss) mush fitness should report on line 21 of forme 1120S, what is the income/loss reconciliation amount that should be reported on line 18 of schedule K?, what i the total income reported on form 1120S line 6?,where should interest income be reported on form 1120S?
Explanation / Answer
Form 1120S (abstract)
Line no
Particulars
Amount ($)
Amount ($)
1a
Gross Receipts
$62,675
1b
Refunds
$550
1c
Balance (1a-1b)
$62,125
2
Cost of Good Sold
$0
3
Gross Profit
$62,125
4
Net Gain Loss from 4797
$0
5
Other Income (Note 1)
$0
6
Total Income (Loss)
$62,125
7
Compensation of Officers
$40,000
8
Other Salaries
$8,000
11
Rents
$12,000
19
Other Deduction (Table 1)
$2,757
20
Total Deduction (line 7-19)
$62,757
21
Ordinary Business Income/(Loss) (6-20)
-$632
Note 1
Interest Income is not considered to be earned in course of normal business hence reported under line number 4 of Schedule K, otherwise to be reported under line no 5
Table 1
Particulars
Amount($)
Fitness Supplies
$750
Laundry Services
$1,200
Towels
$270
Mats
$537
Total
$2,757
Schedule K (Abstract)
Line No
Particulars
Amount ($)
Amount ($)
1
Ordinary Business Income/(Loss)
-$632
4
Interest Income
$6,525
5a
Ordinary Dividend
$0
5b
Qualified Dividend***
$350
18
Reconciliation
$5,893
Line no 5b is only for disclosure and not considered for reconciliation purpose(Line 18) since qualified dividends are considered as passive income
Form 1120S (abstract)
Line no
Particulars
Amount ($)
Amount ($)
1a
Gross Receipts
$62,675
1b
Refunds
$550
1c
Balance (1a-1b)
$62,125
2
Cost of Good Sold
$0
3
Gross Profit
$62,125
4
Net Gain Loss from 4797
$0
5
Other Income (Note 1)
$0
6
Total Income (Loss)
$62,125
7
Compensation of Officers
$40,000
8
Other Salaries
$8,000
11
Rents
$12,000
19
Other Deduction (Table 1)
$2,757
20
Total Deduction (line 7-19)
$62,757
21
Ordinary Business Income/(Loss) (6-20)
-$632
Note 1
Interest Income is not considered to be earned in course of normal business hence reported under line number 4 of Schedule K, otherwise to be reported under line no 5
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