Reference no: EM132673488

Problem - During the current year, Thrasher (a calendar year, accrual basis S corporation) records the following transactions.

Sales $1,500,000

Cost of goods sold 900,000

Long-term capital gain 11,000

Short-term capital gain 5,000

Salaries 210,000

Qualified dividends from stock investments 30,000

Rent expense 170,000

Advertising expense 20,000

Interest expense on business loan 15,000 § 1231 gain 25,000

Organizational expenditures 3,000

Charitable contributions 5,000

Bad debt (trade account receivable deemed to be uncollectible) 10,000

Cash dividend distributed to shareholders 120,000

Required -

a. Determine Thrasher Corporation's separately stated items for the current year.

b. Determine Thrasher's ordinary business income for the current year.