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Waters Corporation is an S corporation with two equal shareholders, Mia Jones and David Kerns....

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Accounting

Waters Corporation is an S corporation with two equal shareholders, Mia Jones and David Kerns. This year, Waters recorded the following items of
income and expense:
Waters distributed $25,000 to each of its shareholders during the year. Calculate the S corporation's ordinary (non-separately stated) income and
indicate which items must be separately stated.
Multiple Choice
Ordinary income, $120,000; interest income and long-term capital gain are separately stated.
Ordinary income, $136,000; nothing is separately stated.
Ordinary income, $195,000; interest income, long-term capital gain, and salary costs are separated.
Ordinary income, $126,000; long-term capital gain is separately stated.
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