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?

Answer 1

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