Instructions
Using the information provided, do the following:
1. Calculate the amount of CPA Bakers' current year ordinary business income (loss)
2. Calculate total separately stated items
CPA Bakers Inc. Income Statement For the Year Ended December 31, 20X1
Sales: $450,000
Cost of goods sold: (150,000)
Charitable contributions: $10,000
Rent expense: 24,000
Interest expense (business-related): 12,000
Officer compensation: 120,000
Depreciation (includes $50,000 Section 179 expense): 55,000
Other income and losses:
Long-term capital gain: $26,000
Dividends from domestic stock: 5,500
Section 1245 gain on truck sale: 10,000
Section 1231 gain on truck sale: 15,000