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Aaron, Deanne, and Keon formed the Blue Bell General Partnership at the beginning of the current year. Aaron and Deanne each contributed $110,000, and Keon transferred an acre of undeveloped land to the partnership. The land had a tax basis of $70,000 and was appraised at $180,000. The land was also encumbered with a $70,000 nonrecourse mortgage for which no one was personally liable. All three partners agreed to split profits and losses equally. At the end of the first year, Blue Bell made a $7,000 principal payment on the mortgage. For the first year of operations, the partnership records disclosed the following information: Sales revenue Cost of goods sold Operating expenses Long-term capital gains §1231 gains Charitable contributions Municipal bond interest Salary paid as a guaranteed payment to Deanne (not included in expenses) $ 470,000 410,000 70,000 2,400 900 300 300 3,000 c. Using the information generated in answering parts (a) and (b). prepare Blue Bell's page 1 and Schedule K to be included with its Form 1065 for its first year of operations, along with Schedule K-1 for Deanne.

Aaron, Deanne, and Keon formed the Blue Bell General Partnership at the beginning of the current year. Aaron and Deanne each contributed $110,000, and Keon transferred an acre of undeveloped land to the partnership. The land had a tax basis of $70,000 and was appraised at $180,000. The land was also encumbered with a $70,000 nonrecourse mortgage for which no one was personally liable. All three partners agreed to split profits and losses equally. At the end of the first year, Blue Bell made a $7,000 principal payment on the mortgage. For the first year of operations, the partnership records disclosed the following information: Sales revenue Cost of goods sold Operating expenses Long-term capital gains §1231 gains Charitable contributions Municipal bond interest Salary paid as a guaranteed payment to Deanne (not included in expenses) $ 470,000 410,000 70,000 2,400 900 300 300 3,000 c. Using the information generated in answering parts (a) and (b). prepare Blue Bell's page 1 and Schedule K to be included with its Form 1065 for its first year of operations, along with Schedule K-1 for Deanne.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Aaron, Deanne, and Keon formed the Blue Bell General Partnership at the beginning of the current year. Aaron and Deanne each contributed $110,000, and Keon transferred an acre of undeveloped land to the partnership. The land had a tax basis of $70,000 and was appraised at $180,000. The land was also encumbered with a $70,000 nonrecourse mortgage for which no one was personally liable. All three partners agreed to split profits and losses equally. At the end of the first year, Blue Bell made a $7,000 principal payment on the mortgage. For the first year of operations, the partnership records disclosed the following information: Sales revenue Cost of goods sold Operating expenses Long-term capital gains §1231 gains Charitable contributions Municipal bond interest Salary paid as a guaranteed payment to Deanne (not included in expenses) $ 470,000 410,000 70,000 2,400 900 300 300 3,000 c. Using the information generated in answering parts (a) and (b). prepare Blue Bell's page 1 and Schedule K to be included with its Form 1065 for its first year of operations, along with Schedule K-1 for Deanne.
Transcribed Image Text:Aaron, Deanne, and Keon formed the Blue Bell General Partnership at the beginning of the current year. Aaron and Deanne each contributed $110,000, and Keon transferred an acre of undeveloped land to the partnership. The land had a tax basis of $70,000 and was appraised at $180,000. The land was also encumbered with a $70,000 nonrecourse mortgage for which no one was personally liable. All three partners agreed to split profits and losses equally. At the end of the first year, Blue Bell made a $7,000 principal payment on the mortgage. For the first year of operations, the partnership records disclosed the following information: Sales revenue Cost of goods sold Operating expenses Long-term capital gains §1231 gains Charitable contributions Municipal bond interest Salary paid as a guaranteed payment to Deanne (not included in expenses) $ 470,000 410,000 70,000 2,400 900 300 300 3,000 c. Using the information generated in answering parts (a) and (b). prepare Blue Bell's page 1 and Schedule K to be included with its Form 1065 for its first year of operations, along with Schedule K-1 for Deanne.
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