Required information Comprehensive Problem 22-86 (Algo) (LO 22-1, LO 22-2, LO 22-3, LO 22-4, LO 22-5, LO 22-6) While Jam

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Required Information Comprehensive Problem 22 86 Algo Lo 22 1 Lo 22 2 Lo 22 3 Lo 22 4 Lo 22 5 Lo 22 6 While Jam 1 (42.03 KiB) Viewed 66 times

Required Information Comprehensive Problem 22 86 Algo Lo 22 1 Lo 22 2 Lo 22 3 Lo 22 4 Lo 22 5 Lo 22 6 While Jam 2 (30.68 KiB) Viewed 66 times

Required Information Comprehensive Problem 22 86 Algo Lo 22 1 Lo 22 2 Lo 22 3 Lo 22 4 Lo 22 5 Lo 22 6 While Jam 3 (29.41 KiB) Viewed 66 times

Required Information Comprehensive Problem 22 86 Algo Lo 22 1 Lo 22 2 Lo 22 3 Lo 22 4 Lo 22 5 Lo 22 6 While Jam 4 (33.3 KiB) Viewed 66 times

Required information Comprehensive Problem 22-86 (Algo) (LO 22-1, LO 22-2, LO 22-3, LO 22-4, LO 22-5, LO 22-6) While James Craig and his former classmate Poul Dotto both studied accounting at school, they ended up pursuing careers in professional cake decorating Their company. Good to Eat (GIE), specializes in custom-sculpted cakes for weddings, birthdays, and other celebrations. James and Paul formed the business at the beginning of 2021, and each contributed $120,000 in exchange for a 50 percent ownership interest GTE also borrowed $480.000 from a local bank Both James and Poul had to personally guarantee the loan Both owners provide significant services for the business. The following information pertains to GTE'S 2021 activities • GTE uses the cash method of accounting (for both book ond tox purposes) and reports income on 8 calendar-year basis • GTE received $800,000 of sales revenue and reported $370,000 of cost of goods sold it did not have any ending inventory) . GTE paid $65.000 compensation to James $65.000 compensation to Paul, and $75.000 of compensation to other employees (assume these amounts include applicable payroll toxes, f any) • GTE paid $22.000 of rent for a building and equipment. $27.000 for advertising $33.600 in interest expense. 54700 for utilities and $2.700 for supplies . GTE contributed $8.500 to charity • GTE received a $2.400 qualified dividend from a great stock investment (t owned 2 percent of the corporation distributing the dividend), and it recognized $2 200 in short-term capital gain when it sold some of the stock . On December 1 2021, GTE distributed $27000 to James and $27,000 to Paul • GTE has qualified property of $307000 (unadjusted basis) (Leave no answer blank. Enter zero if applicable. Enter N/A If not applicable.)

Comprehensive Problem 22-86 (Algo) Part a-3 2-3. Assume James and Paul formed GTE as an Scorporation 1. Compute the tax basis of Poul's stock in GTE at the end of 2021 2. What amount of Paul's income from GTE is subject to FICA or self-employment taxes? 3. What amount of income, including its character will Paul recognize on the $27000 distribution he receives on December 1? 4. What amount of tax does GTE pay on the $2.400 qualified dividend it received? 1. End of Year Stock Basis 2 Paul's income 4. Tax

Comprehensive Problem 22-86 (Algo) Part 6-3 b-3. Assume James and Paul formed GTE as an LLC 1. Compute the tax basis of Paul's ownership interest in GTE at the end of 2021 2. What amount of Paul's income from GTE is subject to FICA or self-employment taxes? 3. What amount of income, including its character, will Paul recognize on the $27,000 distribution he receives on December 12 4. What amount of tax does GTE pay on the $2.400 qualified dividend it received? 1. End of Year Stock Basis 2 Paul's income 4. Tax 27 < Prey 15 16 of 17 Next >

c-2. Assume James and Paul formed GTE as a C corporation 1. Compute the tax basis of Paul's stock in GTE at the end of 2021 2. What amount of Paul's income from GTE is subject to FICA or self-employment taxes? 3. What amount of income, including its character, will Paul recognize on the $27,000 distribution he receives on December 1? 4 What amount of tax does GTE pay on the $2.400 qualified dividend it received? (Do not round intermediate calculations. R. your final answers to the nearest whole dollar amount.) 1 End of Year Stock Basis 2. Paul's income 4. Tex < Prex COD 16 of 17 BB WE Next > e to search o Bite х W 56 <