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Ed was a 25% shareholder in Horsey Corporation, as S Corporation. On April 12, Horsey...

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Accounting

Ed was a 25% shareholder in Horsey Corporation, as S Corporation. On April 12, Horsey brought in a fifth, equal shareholder. At that time, Horsey had year-to-date earnings of $450,000. Horseys earnings for the year totaled $1,300,000. Using the daily allocation method (per share, per day), how much income would be allocated to Ed for the year?

Would your answer to 3 change if Horsey had elected to use the books and records method? How much income would be allocated to Ed then?

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