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Mr. and Ms. Soon are the sole shareholders of SW, Incorporated. For the last three...

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Accounting

Mr. and Ms. Soon are the sole shareholders of SW, Incorporated. For the last three years, SW has employed their child as a sales representative, paying a $30,000 annual salary. During a recent IRS audit, the revenue agent discovered that the child has never made a sale and spends the majority of time playing saxophone in a jazz band.
Required:
Determine the potential effect of this discovery on SW's taxable income and on the Soons' taxable income under the following assumptions:
a. SW, Incorporated is an S corporation.
b. SW, Incorporated is a C corporation.
Complete this question by entering your answers in the tabs below.
Required B
Determine the potential effect of this discovery on SW's taxable income and on the Soons' taxable income assuming SW, Incorporated is an S corporation.
\table[[SW, Incorporated taxable income,,Amount],[Mr and Mrs. Soons taxable income,,]]
Reguired A
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