Waters Corporation Is an S Corporation with Two Equal Shareholders $\quad$

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:
Sales revenue $\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$ $500,000
Interest income $\quad$$\quad$$\quad$$\quad$$\quad$$\quad$ $\quad$ 6,000
Long-term capital gain $\quad$$\quad$$\quad$$\quad$$\quad$ 10,000
Cost of goods sold $\quad$$\quad$$\quad$$\quad$$\quad$ $\quad$ (250,000 )
Salary and wages $\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$ (75,000 )
Other operating expenses $\quad$$\quad$$\quad$ $\quad$ (55,000 )
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.

A) Ordinary income, $126,000; long-term capital gain is separately stated.
B) Ordinary income, $120,000; interest income and long-term capital gain are separately stated.
C) Ordinary income, $136,000; nothing is separately stated.
D) Ordinary income, $195,000; interest income, long-term capital gain, and salary costs are separately stated.