Need to Fill Form 1065 Schedule K and K-1s of both the Partners

Facts Razorback Sports Partnership was formed in 2016 by Austin Williams and Tyler Jacobs. Razorback Sports sells all kinds of sports-related products including equipment, uniforms and athletic shoes. Austin owns 60% of Razorback Sports and Tyler owns the remaining 40%. Razorback Sports is located at 123 College Ave, Fayetteville, AR 72701. Its employer identification number is 29-5748859 and its business activity code is 451110. Razorback Sports uses the accrual method of accounting and has a calendar year-end. The partners of Razorback Sports and their Social Security numbers are: Name Austin Williams Tyler Jacobs SS number 123-45-6789 789-12-3456 A trial balance for the partnership is attached. Additional information is presented below. Amount 3,885 1. Razorback Sports has a capital loss carry over from last year of 2. Interest income: a. From a City of Fayetteville bond that was used to fund new police station b. From a U.S. Treasury bond c. From a money market account 5,994 3,802 6,854 3. Razorback Sports sold equipment. a. Selling price b. Original purchase price c. Total book depreciation on the equipment d. Total tax depreciation on the equipment 10,878 12,654 6,383 8,769 4. Razorback Sports' dividend income came from Cardinal Inc. Razorback Sports owned 25,000 shares of the stock in Cardinal at the beginning of the year. This represented 25% of the Cardinal outstanding stock. 5. On July 22, 2019 Razorback Sports sold 2,500 shares of its Cardinal Inc. stock. a. Selling price Razorback originally purchased these shares on April 24, 2016 c. After the sale, Razorback Sports owned 22.5% of Cardinal Inc. 38,850 26,640 6. Interest expense: a. From the mortgage on Razorback Sports' building The business expense limit does not apply to Razorback Sports 68,820 7. Wages to employees are 854,700 2 8. Pension expense is the same for both book and tax purposes. 9. Miscellaneous expenses include premiums paid on term life insurance policies on the lives of Austin and Tyler (Razorback Sports is the beneficiary of the life insurance policies). 3,608 10. Miscellaneous expenses include parking fines issued by the City of Fayetteville 194 11. The partnership uses MACRS depreciation for tax purposes. The partnership purchased all of its equipment on July 1, 2016. Razorback Sports took the maximum amount of 8179 depreciation (no bonus depreciation). The equipment is all 7 year property. a. Cost of the equipment 832,500 12. Accounts receivable written off by Razorback Sports during the year were 49,950 13. On December 1, 2019 Razorback Sports made a cash distribution to Austin 88,800 14. The partnership made the following guaranteed payments to its partners: Austin Williams Tyler Jacobs 305,250 283,050 15. The partners' basis in their Razorback Sports partnership interests on 1/1/19: Austin Williams Tyler Jacobs 2,610,720 1,906,980 16. All partners devote 100% of their time to the business and all partners are U.S. citizens. 249,750 777,000 416,250 55,500 57,665 41,070 12,210 2,610,720 1,906,980 376,623 88,800 29,970 921,300 22,200 13,320 6,771 832,500 4,496 588,300 68,820 Accounts payable Accounts receivable Accumulated depreciation Advertising expense Allowance for doubtful accounts Bad debt expense Capital gains Capital - Austin Williams (1/1/19) Capital - Tyler Jacobs (1/1/19) Cash Cash distribution Charitable contributions Cost of goods sold Depreciation expense Dividends (received) Entertainment expense Equipment Gain from disposition of fixed assets Guaranteed payments Interest expense Interest income Inventory Investments in state & local bonds Investments in stock Investment in U.S. government bonds Land Maintenance expense Meals expense Miscellaneous expense Mortgage payable Other assets Other current liabilities Other liabilities Other taxes expense Pension plans expense Professional services expense Property tax expense Sales Sales returns & allowance Supplies expense Wage expense 16,650 1,914,750 155,400 305,250 77,700 3,052,500 22,200 9,047 45,510 1,703,961 299,700 146,520 205,350 407,148 46,620 35,520 49,950 3,796,700 46,620 9,102 854,700 $11,140,571 $11,140,571 4 Facts Razorback Sports Partnership was formed in 2016 by Austin Williams and Tyler Jacobs. Razorback Sports sells all kinds of sports-related products including equipment, uniforms and athletic shoes. Austin owns 60% of Razorback Sports and Tyler owns the remaining 40%. Razorback Sports is located at 123 College Ave, Fayetteville, AR 72701. Its employer identification number is 29-5748859 and its business activity code is 451110. Razorback Sports uses the accrual method of accounting and has a calendar year-end. The partners of Razorback Sports and their Social Security numbers are: Name Austin Williams Tyler Jacobs SS number 123-45-6789 789-12-3456 A trial balance for the partnership is attached. Additional information is presented below. Amount 3,885 1. Razorback Sports has a capital loss carry over from last year of 2. Interest income: a. From a City of Fayetteville bond that was used to fund new police station b. From a U.S. Treasury bond c. From a money market account 5,994 3,802 6,854 3. Razorback Sports sold equipment. a. Selling price b. Original purchase price c. Total book depreciation on the equipment d. Total tax depreciation on the equipment 10,878 12,654 6,383 8,769 4. Razorback Sports' dividend income came from Cardinal Inc. Razorback Sports owned 25,000 shares of the stock in Cardinal at the beginning of the year. This represented 25% of the Cardinal outstanding stock. 5. On July 22, 2019 Razorback Sports sold 2,500 shares of its Cardinal Inc. stock. a. Selling price Razorback originally purchased these shares on April 24, 2016 c. After the sale, Razorback Sports owned 22.5% of Cardinal Inc. 38,850 26,640 6. Interest expense: a. From the mortgage on Razorback Sports' building The business expense limit does not apply to Razorback Sports 68,820 7. Wages to employees are 854,700 2 8. Pension expense is the same for both book and tax purposes. 9. Miscellaneous expenses include premiums paid on term life insurance policies on the lives of Austin and Tyler (Razorback Sports is the beneficiary of the life insurance policies). 3,608 10. Miscellaneous expenses include parking fines issued by the City of Fayetteville 194 11. The partnership uses MACRS depreciation for tax purposes. The partnership purchased all of its equipment on July 1, 2016. Razorback Sports took the maximum amount of 8179 depreciation (no bonus depreciation). The equipment is all 7 year property. a. Cost of the equipment 832,500 12. Accounts receivable written off by Razorback Sports during the year were 49,950 13. On December 1, 2019 Razorback Sports made a cash distribution to Austin 88,800 14. The partnership made the following guaranteed payments to its partners: Austin Williams Tyler Jacobs 305,250 283,050 15. The partners' basis in their Razorback Sports partnership interests on 1/1/19: Austin Williams Tyler Jacobs 2,610,720 1,906,980 16. All partners devote 100% of their time to the business and all partners are U.S. citizens. 249,750 777,000 416,250 55,500 57,665 41,070 12,210 2,610,720 1,906,980 376,623 88,800 29,970 921,300 22,200 13,320 6,771 832,500 4,496 588,300 68,820 Accounts payable Accounts receivable Accumulated depreciation Advertising expense Allowance for doubtful accounts Bad debt expense Capital gains Capital - Austin Williams (1/1/19) Capital - Tyler Jacobs (1/1/19) Cash Cash distribution Charitable contributions Cost of goods sold Depreciation expense Dividends (received) Entertainment expense Equipment Gain from disposition of fixed assets Guaranteed payments Interest expense Interest income Inventory Investments in state & local bonds Investments in stock Investment in U.S. government bonds Land Maintenance expense Meals expense Miscellaneous expense Mortgage payable Other assets Other current liabilities Other liabilities Other taxes expense Pension plans expense Professional services expense Property tax expense Sales Sales returns & allowance Supplies expense Wage expense 16,650 1,914,750 155,400 305,250 77,700 3,052,500 22,200 9,047 45,510 1,703,961 299,700 146,520 205,350 407,148 46,620 35,520 49,950 3,796,700 46,620 9,102 854,700 $11,140,571 $11,140,571 4