Question

A. Winkin, Blinkin, and Nod are equal shareholders in SleepEZ, an S corporation. On March 15,...

A.

Winkin, Blinkin, and Nod are equal shareholders in SleepEZ, an S corporation. On March 15, 2019, Blinkin sells his shares to Nod. How much income should Blinkin report from SleepEZ for 2019 under the daily allocation? Refer to the following table for the timing of SleepEZ’s income.

Period

Income

January 1 through March 15 (74 days)

$100,000

March 16 through December 31 (291 days)

345,500

January 1 through December 31, 2019 (365 days)

$445,500

B.

Based upon the same facts in the prior question, how much income should Nod report from SleepEZ for 2019 under the specific identification method?

Homework Answers

Answer #1

Sollution 1

Blinkin should report $30106.85 Income from SleepEZ for 2019 under the daily allocation

Working

Daily allocation method
Name Working Amount
Winkin (445500*365/365*1/3) $148,500.00
Blinkin (445500*74/365*1/3) $30,106.85
Nod       (445500*365/365*1/3 )+(445500*291/365*1/3
($148500+118393.15)= $266,893.15
Total $445,500.00

Sollution2

Nod should report $263666.67  Income from SleepEZ for 2019 under the specific identification method

Working

Specific identification method
Name Working Amount
Winkin (100000*1/3)+(345500*1/3)= $148,500.00
Blinkin (100000*1/3)+(345500*0/3)= $33,333.33
Nod (100000*1/3)+(345500*2/3)= $263,666.67
Total $445,500.00
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Winkin, Blinkin, and Nod are equal shareholders in SleepEZ, an S corporation. In the conditions listed...
Winkin, Blinkin, and Nod are equal shareholders in SleepEZ, an S corporation. In the conditions listed below, how much income should each report from SleepEZ for 2017 under both the daily allocation and the specific identification allocation method? Refer to the following table for the timing of SleepEZ’s income. Period Income January 1 through March 1 (60 days) $ 125,000 March 2 through December 31 (305 days) 350,000 January 1 through December 31, 2017 (365 days) $ 475,000 a. There...
Winkin, Blinkin, and Nod are equal shareholders in SleepEZ, an S corporation. In the conditions listed...
Winkin, Blinkin, and Nod are equal shareholders in SleepEZ, an S corporation. In the conditions listed below, how much income should each report from SleepEZ for 2018 under both the daily allocation and the specific identification allocation method? Refer to the following table for the timing of SleepEZ’s income. Period Income January 1 through February 12 (42 days) $ 128,000 February 13 through December 31 (323 days) 362,000 January 1 through December 31, 2018 (365 days) $ 490,000 b. On...
On March 15, 2017, Walker Company purchased 60,000 of the 200,000 (which is 30%) of the...
On March 15, 2017, Walker Company purchased 60,000 of the 200,000 (which is 30%) of the outstanding shares of Hurtado Company stock for $11.50 per share. On June 30, 2017, Hurtado paid an $80,000 dividend to its shareholders. On December 31, 2017, Hurtado declared net income of $420,000. The fair value of Hurtado’s stock was $13.75 per share on December 31, 2017. At what amount will Walker report its investment in Hurtado Company stock on its December 31, 2017 balance...
In Bangzia, employees take Wednesdays off, and the following holidays: January 3, March 12, April 15,...
In Bangzia, employees take Wednesdays off, and the following holidays: January 3, March 12, April 15, July 1, August 12, October 26, and December 3. Design a spreadsheet model in which the user can enter the start and end dates, and the worksheet returns the total number of working days? Your model should work for end dates entered up to and including December 31, 2035. Use formulas to generate the dates of the holidays. The result should be blank if...
2. The fieldwork for the December 31, 2007 audit of Treble Corporation ended on March 17,...
2. The fieldwork for the December 31, 2007 audit of Treble Corporation ended on March 17, 2008. The financial statements and auditor's report were issued and mailed to stockholders on March 29, 2008. In each of the material situations (1 through 4) below, indicate the appropriate action (a, b, c, d, or e). The possible actions are as follows: a. Adjust the December 31, 2007 financial statements. b. Disclose the information in a footnote in the December 31, 2007 financial...
LOCKE INTERTECHNOLOGY CORPORATION Statements of Shareholders' Equity For the Years Ended Dec. 31, 2019, 2020, and...
LOCKE INTERTECHNOLOGY CORPORATION Statements of Shareholders' Equity For the Years Ended Dec. 31, 2019, 2020, and 2021 ($ in millions) Preferred Stock, $10 par Common Stock, $1 par Additional Paid-in Capital Retained Earnings Total Shareholders' Equity Balance at January 1, 2019 $ 65 $ 575 $ 1,910 $ 2,550 Sale of preferred shares 7 570 577 Sale of common shares, 7/1 6 90 96 Cash dividend, preferred (1 ) (1 ) Cash dividend, common (18 ) (18 ) Net income...
Exercise 11-15 a On March 10, 2022, Swifty Company sells equipment that it purchased for $197,760...
Exercise 11-15 a On March 10, 2022, Swifty Company sells equipment that it purchased for $197,760 on August 20, 2015. It was originally estimated that the equipment would have a life of 12 years and a salvage value of $17,304 at the end of that time, and depreciation has been computed on that basis. The company uses the straight-line method of depreciation. Compute the depreciation charge on this equipment for 2015, for 2022, and the total charge for the period...
Comparative Statements of Shareholders’ Equity for Locke Intertechnology Corporation were reported as follows for the fiscal...
Comparative Statements of Shareholders’ Equity for Locke Intertechnology Corporation were reported as follows for the fiscal years ending December 31, 2014, 2015, and 2016. LOCKE INTERTECHNOLOGY CORPORATION Statements of Shareholders' Equity For the Years Ended Dec. 31, 2014, 2015, and 2016 ($ in millions) Preferred Stock, $10 par Common Stock, $1 par Additional Paid-in Capital Retained Earnings Total Shareholders' Equity   Balance at January 1, 2014 $ 65 $ 515 $ 1,886 $ 2,466      Sale of preferred shares 9 450 459...
Comparative Statements of Shareholders’ Equity for Locke Intertechnology Corporation were reported as follows for the fiscal...
Comparative Statements of Shareholders’ Equity for Locke Intertechnology Corporation were reported as follows for the fiscal years ending December 31, 2014, 2015, and 2016. LOCKE INTERTECHNOLOGY CORPORATION Statements of Shareholders' Equity For the Years Ended Dec. 31, 2014, 2015, and 2016 ($ in millions) Preferred Stock, $10 par Common Stock, $1 par Additional Paid-in Capital Retained Earnings Total Shareholders' Equity   Balance at January 1, 2014 $ 65 $ 515 $ 1,886 $ 2,466      Sale of preferred shares 9 450 459...
Comparative Statements of Shareholders’ Equity for Locke Intertechnology Corporation were reported as follows for the fiscal...
Comparative Statements of Shareholders’ Equity for Locke Intertechnology Corporation were reported as follows for the fiscal years ending December 31, 2014, 2015, and 2016. LOCKE INTERTECHNOLOGY CORPORATION Statements of Shareholders' Equity For the Years Ended Dec. 31, 2014, 2015, and 2016 ($ in millions) Preferred Stock, $10 par Common Stock, $1 par Additional Paid-in Capital Retained Earnings Total Shareholders' Equity   Balance at January 1, 2014 $ 65 $ 515 $ 1,886 $ 2,466      Sale of preferred shares 9 450 459...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT