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Given are net income per books. Need net income per tax as there are book/tax differences. Part Facts: Amad Aarons and Bob Brooks are equal
Given are net income per books. Need net income per tax as there are book/tax differences. Part Facts: Amad Aarons and Bob Brooks are equal partners in A&B, a general partnership started on April 1, 2014. A&B's EIN is 12-3456789. A&B's address is 1 Main Street, Sacramento, CA 95816. A&B is a calendar-year, accrual-method partnership. The principal business activity and product/service is Sporting Goods Store, and the business code is 451110 A&B's net income per books in 2016 was $312,000. The following items come from A&B's 2016 income statement (book, not tax, income and expenses): $815,000 (this includes $10,000 in prepaid services received in 2015 but included in book income in 2016 - discussed below) $15,000 $240,000 $130,000 (not paid to partners) $9,000 $24,000 $45,000 $30,000 (all subject to 50% limit) $10,000 (none of which represents wholly or partially worthless debt) Gross receipts: Refunds: Cost of Goods Sold Employee Salaries: Payroll Taxes: Rent: Advertising: Meals & Entertainment Bad Debt Allowance: For tax purposes, A&B's beginning inventory value was $150,000, 2016 inventory purchases were $250,000, and ending inventory value was $160,000. Inventory was valued using the cost method, and LIFO was not adopted or used in 2016. 263A does not apply On January 1, 2015, A&B received a prepayment for services totaling $30,000. The services were performed 1/3 in 2015, 1/3 in 2016 and 1/3 will be performed in 2017. For book purposes, the income was recognized as follows: $10,000 in 2015, $10,000 in 2016 and $10,000 in 2017. Assignment: 1. Please prepare the following for A&B using the Forms and Schedules provided on the course website: A. Form 1065 (Page 1 & Schedule M-1 only; include your name as the paid preparer, but leave the return unsigned); and B. Form 1125-A Leave all other Schedules on the Form 1065 blank. Do not use commercial tax preparation software to prepare your tax return
Given are net income per books. Need net income per tax as there are book/tax differences.
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