Discussion Question 17-2 Corporation Versus S Corporation - Treatment of Operating Income and Tax-exempt Income; no Distributions (LO.

Discussion Question 17-2Corporation Versus S Corporation - Treatment of Operating Income and Tax-exempt Income; no Distributions (LO. 1)Barbara owns 40% of the stock of Cassowary Corporation (a C corporation) and 40% of the stock of Emu Corporation (an S corporation). During 2012, each corporation has operating income of $120,000 (after income tax expense) and tax-exempt interest income of $8,000. Neither corporation pays any dividends during the year. How is this information reported by the corporations and Barbara for 2012?Since C corporations are entities, Cassowary Corporation will the operating income and tax-exempt income. An S corporation is a entity. Therefore, Barbara will report ordinary business income of $ and tax-exempt interest income of $ on her individual return