The partnership agreement of the G&P general partnership states that Gary will receive a guaranteed payment of $14, 100, and that Gary and Prudence will share the remaining profits or losses in a 45/55 ratio. For year 1, the G&P partnership reports the following results: Sales revenue $ 91,500 Gain on sale of land (§1231) 7,500 Cost of goods sold (53, 500) Depreciation-MACRS (15,600) Employee wages (11, 100) Cash charitable contributions (5,300) Municipal bond interest 5,450 Other expenses (5, 100) Note: Negative amounts should be indicated by a minus sign. Problem 20 - 61 Part a (Algo) Required: a-1. How much ordinary income (loss) is allocated to Gary for the year? a-2. Compute Gary's share of separately stated items to be reported on his year 1 Schedule K-1, including his self-employment income (loss).
The partnership agreement of the G&P general partnership states that Gary will receive a guaranteed payment of $14, 100, and that Gary and Prudence will share the remaining profits or losses in a 45/55 ratio. For year 1, the G&P partnership reports the following results: Sales revenue $ 91,500 Gain on sale of land (§1231) 7,500 Cost of goods sold (53, 500) Depreciation-MACRS (15,600) Employee wages (11, 100) Cash charitable contributions (5,300) Municipal bond interest 5,450 Other expenses (5, 100) Note: Negative amounts should be indicated by a minus sign. Problem 20 - 61 Part a (Algo) Required: a-1. How much ordinary income (loss) is allocated to Gary for the year? a-2. Compute Gary's share of separately stated items to be reported on his year 1 Schedule K-1, including his self-employment income (loss).
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:The partnership agreement of the G&P general partnership states that Gary will receive a guaranteed
payment of $14, 100, and that Gary and Prudence will share the remaining profits or losses in a 45/55 ratio.
For year 1, the G&P partnership reports the following results: Sales revenue $ 91,500 Gain on sale of land
(§1231) 7,500 Cost of goods sold (53, 500) Depreciation-MACRS (15,600) Employee wages (11, 100)
Cash charitable contributions (5,300) Municipal bond interest 5,450 Other expenses (5, 100) Note: Negative
amounts should be indicated by a minus sign. Problem 20 - 61 Part a (Algo) Required: a-1. How much
ordinary income (loss) is allocated to Gary for the year? a-2. Compute Gary's share of separately stated
items to be reported on his year 1 Schedule K-1, including his self-employment income (loss).
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