Robert Conrad and Jan Springs are equal partners in the Malus Valley Partnership.

During 2010, the partnership began operations and had the following income and expenses:

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Gross income from operations $255,600 Deductions: Salaries to employees $168,000 Rent 12,000 Payroll taxes 6,100 Depreciation 9,250 Charitable contributions (to 50-percent 1,500 organizations) Cash withdrawals ($25,000 for each partner) 50,000 The partnership's balance sheet is as follows: Assets: Cash Malus Valley Balance Sheet as of December 31, 2010 $ 27,000 Accounts receivable Land 10,000 115,000 Building Less: accumulated depreciation $115,000 (9,250) 105,750 Total Assets $257,750 Liabilities and Partners' Capital: Accounts payable Mortgage payable Partners' capital ($31,500 contributed, $15,750 by each partner) Total Liabilities and Partners' Capital $29,750 187,750 40,250 $257,750 Complete Form 1065, page 1, and Schedules K, L, M-1, and M-2 on pages 10-7 to 10-11 for Malus Valley. Also, complete Schedule K-1 on pages 10-13 and 10-14 for Robert.