nkjjj Faith Busby and Jeremy Beatty started the B&B partnership on January 1, Year1. The business acquired $101,500 cash from Busby and $188,500 from Beatty.During Year 1, the partnership earned $63,400 in cash revenues and paid $27,100 for cash expenses. Busby withdrew $2,300 cash from the business, andBeatty withdrew $4,500 cash. The net income was allocated to the capitalaccounts of the two partners in proportion to the amounts of their originalinvestments in the business.RequiredPrepare an income statement, capital statement (statement of changes in equity), balance sheet, and statement of cash flows for B&B's Year 1 fiscal year.

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SWFT Essntl Tax Individ/Bus Entities 2020

23rd Edition

ISBN:9780357391266

Author:Nellen

Publisher:Nellen

Chapter14: Partnerships And Limited Liability Entities

Section: Chapter Questions

Problem 24P

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Faith Busby and Jeremy Beatty started the B&B partnership on January 1, Year 1. The business acquired $93,000 cash from Busby and $207,000 from Beatty. During Year 1, the partnership earned $62,900 in cash revenues and paid $34,050 for cash expenses. Busby withdrew $2,900 cash from the business, and Beatty withdrew $4,700 cash. The net income was allocated to the capital accounts of the two partners in proportion to the amounts of their original investments in the business. Required Prepare an income statement, capital statement (statement of changes in equity),
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Josee is a 1/3 partner in HJC Partnership. This year, the partnership had the following transactions: Rental income $ 8,500 Salaries paid $ 45,000 Cost recovery deductions $ 18,000 Municipal bond interest $ 1,100 Supplies, repairs $ 2,000 Charitable contribution $ 1,000 Short-term capital gain $ 17,000 Payroll taxes paid $ 12,500 Fees received $ 90,000 Dividend income $ 2,500 Cost recovery (AMT) $ 5,600 Required: Show how the above transactions will be reported to Josee (Ordinary income vs. separately stated). For each separately stated item, state why it must be separately stated. (Show your work)
Oliva Tsang and David Breck began a partnership by investing $5,000 and $45,000 respectively. For the year-ended December 31, 2009, the partnership earned $100,000. The partners agree to share income by allowing a $65,000 per year salary allowance to Breck, a $15,000 per year salary allowance to Tsang, 5% interest on beginning capital balances and the remainder equally. Prepare calculations that show how the income should be allocated to the partners under the following plans for sharing net incomes and losses.
Lloyd and Harry, equal partners, form the Ant World Partnership. During the year, Ant World had the following revenue, expenses, gains, losses, and distributions: Cost of Goods Sold $ 85,000 Cash Distribution to Harry $ 15,000 Municipal Bond Interest $ 1,500 Short-Term Capital Gains $ 4,500 Employee Wages $ 40,000 Rent $ 10,000 Charitable Contributions $ 25,000 Sales $ 175,000 Repairs and Maintenance $ 5,000 Long-Term Capital Gains $ 12,000 Fines and Penalties $ 5,000 Guaranteed Payment to Lloyd $ 25,000 Given these items, calculate Lloyd's share of ordinary business income (loss) for the year? The correct answer should be $5000

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