Must fill out blanks on spreadsheet with given data. Need M-1 Adjustments, Non-separately stated and separately Stated columns. Thank you!

Juan Lopez is a 70 percent general partner, and Carolina Lopez is a 30 percent general partner who, among other duties, deals with tax matters for the partnership. Both Juan and Carolina devote 100 percent of their time to the business. Juan lives at 50 Sunset Court, Phoenix, Arizona 85013 and Carolina resides at 24 Polaris Street, Phoenix, Arizona 85013. Both partners and the partnership file Federal income tax returns at the IRS Service Center in Ogden, Utah. 468,608 The partnership files its tax return on the accrual method. Inventory has been consistently valued at cost under the FIFO method using the full absorption procedure. Inventory capitalization rules of Internal Revenue Code Section 263A do not apply due to the 'small business exception' (average annual gross receipts for the three preceding taxable years do not exceed $10 million). The accounting records are computerized. ADDITIONAL INFORMATION 1. Dividend income is from the following sources: Fold & Go Sunwear Company Income Statement For the Year Ended 12/31/21 Revenue Sales (net) 795,782 Cost of Goods Sold (327,174) Gross Profit Operating Expenses Wages to Employees 121,146 Guaranteed Payment to Carolina Lopez 35,568 Rental Expense 56,523 Interest Expense 21,360 Advertising 37,560 Contributions to United Way 3,556 Depreciation Expense 16,050 Taxes 16,439 Shipping 21,317 Repairs and Maintenance 5.277 Total Operating Expenses Net Income from Operations Other Income and Expenses Dividend Income 8,537 Interest Income 3,023 Interest expense related to investments (13,614) Net Loss on Sale of Investments (5,514) Net Loss on Sale of Business Assets (14,894) Net Income Plastics Corporation.. Lens Corp. Compact Corp. Total $4,802 1,755 1.980 $8,537 (334,796) 133,812 2. Interest Income includes $1,600 received on City of Phoenix, Arizona General Obligation bonds. Fold & Go Sun Wear Company's employees have been unable to locate a Form 1099 for the interest 3. Depreciation/Cost Recovery information is attached. 4. (22,462) 111.350 On March 23, 2021, a loss of $5,514 was suffered on the sale of 120 shares of common stock of Polarize, Inc. The stock, purchased on September 11, 2006, for $7,114, had been held for investment. After considering the sale, Juan convinced himself that the sale had been premature Fold & Go Sunwear Company Balance Sheet 12/31/2021 ASSETS 12/31/2020 12/31/2021 Current Assets Cash & Marketable Securities 131,860 128,340 Accounts Receivable 19,207 27,633 Inventory 54 899 89,072 Total Current Assets 205,966 245,095 Depreciable Assets Cost 240.084 240,973 Less: Accumualted Depreciation (32.381 129.535 Total Equipment. Building, and Land 207.703 211.438 Other Assets Land (used in the business) 133,380 88,920 Total Assets 547.049 545,452 because this company's record could only improve. Juan had the partnership repurchase 30 shares of Polarize, Inc. common stock on April 11, 2021, for $2,472. 5. Several business assets were sold during the year. A schedule attached to the partnership's financial statements provide these details: Asset Date Sold Price Cost Depreciation Gain (Loss) 38.133 168.948 207,081 25.900 146,040 171.940 LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities Accounts Payable Notes Payable-current Total Liabilities Capital Juan Lopez Carolina Lopez Total Capital Total Liabilites and Capital Land *03/12/21 Buildings *03/12/21 M&E (Acq. 2017) **04/20/21 M&E (Acq. 2019) **04/20/21 Totals $35,568 24,019 4,446 17,773 $81,806 $44,460 26,676 26,676 17,784 $115,596 $ 0 4,224 10,670 4,002 $18,896 $(8,892) 1,567 (11,560) 3,991 $(14,894) 237,978 101,990 339.968 547,049 261,459 112,054 373,513 545,453 *The land and buildings were sold to Juan Lopez for independently appraised fair market values. Both assets were acquired on 10/01/16. **All machinery and equipment disposed of during the year was sold to an unrelated third party. 6. Investment interest expense is for: Fold & Go Sunwear Company Statement of Partners' Capital For the Year Ended 12/31/21 Juan Carolina Lopez Lopez Total Partner Capital 1/1/21 237,978 101,990 339.968 Net Income for the year 77,946 33,404 111,350 Partners' Withdrawals (54,464) 23.341) (77.805) Partner Capital 12/31/21 261.460 112.053 373.513 Loan to buy City of Phoenix, Arizona bonds. Loan to buy Amazon Corp. stock Loan to buy Pearl Corp. stock Total ... $2,223 4,357 7,034 $13,614 Fold & Go Sunwear - RECONCILIATION FROM BOOK TO TAX Per Audited M-1 Tax Return 1065 Fin. State. Adjust 2021 Non-S/S Income Sales (Net) $795,782 $795,782 $ Cost of Goods Sold ($327,174) ($327,174) Gross Profit $468,608 $468,608 SCH. K S/S (Lines 2-11) 12 - 13(d); 16(p) Dividend Income Interest Income Net loss - Sale of Investment Net loss - Sale of Bus. Assets $8,537 $3,023 ($5,514) ($8,892) $1,567 ($11,560) $3,991 $8,537 $3,023 ($5,514) ($8,892) $365 ($11,560) $3,991 ($1,202) $365 Interest Expense - Investments ($13,614) ($13,614) SS Guaranteed Payment (Carolina) ($35,568) ($35,568) $35,568 $35,568 ordinary Other Sal. & Wages Rental Expense Interest Expense Advertising Expense Contributions Depreciation Expense Taxes Foreign Income Tax W/H Shipping Rep. & Maint. Exp. ($121,146) ($56,523) ($21,360) ($37,560) ($3,556) ($16,050) ($16,439) $0 ($21,317) ($5,277) ($35,568) $35,568 ($121,146) ($56,523) ($21,360) ($37,560 ($3,556) ($16,050) ($16,439) $0 ($21,317) ($5,277) not using for project N. 1. Per Books $111,350 Total Adjustments $34,366 $145,716 Taxable Income Before Separation (M-1 Line 9) $145,716 ($35,568) $35,933 $94,326 $142,236.00 S/E Tax $365 Sch K (Analysis of Net Income) Line 1 same $142,236.00 Net Non-SS 70% juan, carolina 30% $8,441.00 Less recap Gain carloline 100% $35,568.00 Plus Guaranteed Payment Deduct) Sched. K, Line 14a $169,363.00 Total Earnings from SE Sched K-1, Line 14a Sched K-1, Line 14a Juan Lopez is a 70 percent general partner, and Carolina Lopez is a 30 percent general partner who, among other duties, deals with tax matters for the partnership. Both Juan and Carolina devote 100 percent of their time to the business. Juan lives at 50 Sunset Court, Phoenix, Arizona 85013 and Carolina resides at 24 Polaris Street, Phoenix, Arizona 85013. Both partners and the partnership file Federal income tax returns at the IRS Service Center in Ogden, Utah. 468,608 The partnership files its tax return on the accrual method. Inventory has been consistently valued at cost under the FIFO method using the full absorption procedure. Inventory capitalization rules of Internal Revenue Code Section 263A do not apply due to the 'small business exception' (average annual gross receipts for the three preceding taxable years do not exceed $10 million). The accounting records are computerized. ADDITIONAL INFORMATION 1. Dividend income is from the following sources: Fold & Go Sunwear Company Income Statement For the Year Ended 12/31/21 Revenue Sales (net) 795,782 Cost of Goods Sold (327,174) Gross Profit Operating Expenses Wages to Employees 121,146 Guaranteed Payment to Carolina Lopez 35,568 Rental Expense 56,523 Interest Expense 21,360 Advertising 37,560 Contributions to United Way 3,556 Depreciation Expense 16,050 Taxes 16,439 Shipping 21,317 Repairs and Maintenance 5.277 Total Operating Expenses Net Income from Operations Other Income and Expenses Dividend Income 8,537 Interest Income 3,023 Interest expense related to investments (13,614) Net Loss on Sale of Investments (5,514) Net Loss on Sale of Business Assets (14,894) Net Income Plastics Corporation.. Lens Corp. Compact Corp. Total $4,802 1,755 1.980 $8,537 (334,796) 133,812 2. Interest Income includes $1,600 received on City of Phoenix, Arizona General Obligation bonds. Fold & Go Sun Wear Company's employees have been unable to locate a Form 1099 for the interest 3. Depreciation/Cost Recovery information is attached. 4. (22,462) 111.350 On March 23, 2021, a loss of $5,514 was suffered on the sale of 120 shares of common stock of Polarize, Inc. The stock, purchased on September 11, 2006, for $7,114, had been held for investment. After considering the sale, Juan convinced himself that the sale had been premature Fold & Go Sunwear Company Balance Sheet 12/31/2021 ASSETS 12/31/2020 12/31/2021 Current Assets Cash & Marketable Securities 131,860 128,340 Accounts Receivable 19,207 27,633 Inventory 54 899 89,072 Total Current Assets 205,966 245,095 Depreciable Assets Cost 240.084 240,973 Less: Accumualted Depreciation (32.381 129.535 Total Equipment. Building, and Land 207.703 211.438 Other Assets Land (used in the business) 133,380 88,920 Total Assets 547.049 545,452 because this company's record could only improve. Juan had the partnership repurchase 30 shares of Polarize, Inc. common stock on April 11, 2021, for $2,472. 5. Several business assets were sold during the year. A schedule attached to the partnership's financial statements provide these details: Asset Date Sold Price Cost Depreciation Gain (Loss) 38.133 168.948 207,081 25.900 146,040 171.940 LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities Accounts Payable Notes Payable-current Total Liabilities Capital Juan Lopez Carolina Lopez Total Capital Total Liabilites and Capital Land *03/12/21 Buildings *03/12/21 M&E (Acq. 2017) **04/20/21 M&E (Acq. 2019) **04/20/21 Totals $35,568 24,019 4,446 17,773 $81,806 $44,460 26,676 26,676 17,784 $115,596 $ 0 4,224 10,670 4,002 $18,896 $(8,892) 1,567 (11,560) 3,991 $(14,894) 237,978 101,990 339.968 547,049 261,459 112,054 373,513 545,453 *The land and buildings were sold to Juan Lopez for independently appraised fair market values. Both assets were acquired on 10/01/16. **All machinery and equipment disposed of during the year was sold to an unrelated third party. 6. Investment interest expense is for: Fold & Go Sunwear Company Statement of Partners' Capital For the Year Ended 12/31/21 Juan Carolina Lopez Lopez Total Partner Capital 1/1/21 237,978 101,990 339.968 Net Income for the year 77,946 33,404 111,350 Partners' Withdrawals (54,464) 23.341) (77.805) Partner Capital 12/31/21 261.460 112.053 373.513 Loan to buy City of Phoenix, Arizona bonds. Loan to buy Amazon Corp. stock Loan to buy Pearl Corp. stock Total ... $2,223 4,357 7,034 $13,614 Fold & Go Sunwear - RECONCILIATION FROM BOOK TO TAX Per Audited M-1 Tax Return 1065 Fin. State. Adjust 2021 Non-S/S Income Sales (Net) $795,782 $795,782 $ Cost of Goods Sold ($327,174) ($327,174) Gross Profit $468,608 $468,608 SCH. K S/S (Lines 2-11) 12 - 13(d); 16(p) Dividend Income Interest Income Net loss - Sale of Investment Net loss - Sale of Bus. Assets $8,537 $3,023 ($5,514) ($8,892) $1,567 ($11,560) $3,991 $8,537 $3,023 ($5,514) ($8,892) $365 ($11,560) $3,991 ($1,202) $365 Interest Expense - Investments ($13,614) ($13,614) SS Guaranteed Payment (Carolina) ($35,568) ($35,568) $35,568 $35,568 ordinary Other Sal. & Wages Rental Expense Interest Expense Advertising Expense Contributions Depreciation Expense Taxes Foreign Income Tax W/H Shipping Rep. & Maint. Exp. ($121,146) ($56,523) ($21,360) ($37,560) ($3,556) ($16,050) ($16,439) $0 ($21,317) ($5,277) ($35,568) $35,568 ($121,146) ($56,523) ($21,360) ($37,560 ($3,556) ($16,050) ($16,439) $0 ($21,317) ($5,277) not using for project N. 1. Per Books $111,350 Total Adjustments $34,366 $145,716 Taxable Income Before Separation (M-1 Line 9) $145,716 ($35,568) $35,933 $94,326 $142,236.00 S/E Tax $365 Sch K (Analysis of Net Income) Line 1 same $142,236.00 Net Non-SS 70% juan, carolina 30% $8,441.00 Less recap Gain carloline 100% $35,568.00 Plus Guaranteed Payment Deduct) Sched. K, Line 14a $169,363.00 Total Earnings from SE Sched K-1, Line 14a Sched K-1, Line 14a