Okay I don't know if Jeff will remove this post, but after looking over this one question in the newly released 2015 questions for the longest time, I have finally figured out the answer. I don't know if this is the right approach, but here it is.
An S corporation had the following income and expenses:
Sales $240,000
Rent Expense 25,000
Entertainment Expense 5,000
Interest Income 1,500
Contributions to a qualifying charities 600
Section 179 Expense 3,000
Depreciation Expense 1,800
What would be reported as ordinary income on the corporation's income tax return?
A. 206,100
B. 208,600
C. 210,700
D. 213,200
I kept forgetting that M/E are up to 50% deductible.
240,000-25,000-2,500-1,800 = 210,700
Interest Income, Charitable Contributions, and Section 179 are separately stated items.
So answer is C.
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