Arnold is the President of Conrad Corporation. Arnold owns 30% of Conrad, which is organized as an S corporation. Arnold's salary is $100,000. Conrad reports the following for the current year:
Conrad Corporation pays $400,000 of dividends. Explain the effect of the above information on Arnold's adjusted gross income.
$$\begin{array} { l r }
\text { Sales } & \$ 4,000,000 \
\text { Cost of goods sold } & ( 1,700,000 ) \
\text { Operating expenses } & ( 1,200,000 ) \
\text { Sal aries (includes Amold's salary) } & ( 600,000 ) \
\text { Capital loss } & ( 200,000 ) \
\text { Net income } & \$ 300,000
\end{array}$$

Question

Arnold is the President of Conrad Corporation. Arnold owns 30% of Conrad, which is organized as an S corporation. Arnold's salary is $100,000. Conrad reports the following for the current year:
Conrad Corporation pays $400,000 of dividends. Explain the effect of the above information on Arnold's adjusted gross income.
 $$\begin{array} { l r } 
\text { Sales } & \$ 4,000,000 \
\text { Cost of goods sold } & ( 1,700,000 ) \
\text { Operating expenses } & ( 1,200,000 ) \
\text { Sal aries (includes Amold's salary) } & ( 600,000 ) \
\text { Capital loss } & ( 200,000 ) \
\text { Net income } & \$ 300,000
\end{array}$$

Quizplus · Accepted Answer

The Answer of Arnold is the President of Conrad Corporation. Arnold owns 30% of Conrad, which is organized as an S corporation. Arnold's salary is $100,000. Conrad reports the following for the current year:
Conrad Corporation pays $400,000 of dividends. Explain the effect of the above information on Arnold's adjusted gross income.
 $$\begin{array} { l r } 
\text { Sales } & \$ 4,000,000 \
\text { Cost of goods sold } & ( 1,700,000 ) \
\text { Operating expenses } & ( 1,200,000 ) \
\text { Sal aries (includes Amold's salary) } & ( 600,000 ) \
\text { Capital loss } & ( 200,000 ) \
\text { Net income } & \$ 300,000
\end{array}$$

Arnold Is the President of Conrad Corporation