Overview:

Amy Smith $($SSN $123-56-7890)$ and Betty Brown $($SSN $125-892-4523)$ are partners in a partnership that owns and operates the A&B Salon $($a hypothetical company$).$ The partnership$$s first year of operation is $2020.$ Amy and Betty divide income and expenses equally. They are located at $1500$ Broadway, Brooklyn, NY$.10005.$ Their federal employer ID number is $88-1234563,$ and the business code number is $812112.$ The $2020$ financial statements for the partnership are presented below.

A&B Salon Income Statement

For the Year Ended December $31,2020$

Service Income $$400,000$

Employee salaries $90,000$

Guaranteed Payments $($services$)10,000$

Payroll taxes $15,000$

Entertainment $3\mathrm{.}000$

Repairs $5,000$

Rent $40\mathrm{.}000$

Depreciation $6,000$

Short$-$term capital loss $3,000$

Charitable contributions $1,000$

Net Income $$227,000$

A&B Salon Balance Sheet

As of December $31,2020$

Cash $$110,000$

Accounts Receivable $70,000$

Equipment $35,000$

Accumulated Depreciation $6,000$

Total Assets $$221,000$

Accounts Payable $50,000$

Partner$$s Capital $171,000$

Total Liabilities and Equity $$221,000$

Instructions:

Amy lives at $123$ Bay Street, Bay Ridge, NY $12305.$ Each partner initially contributed $$25,000$ to the business. Also, each partner withdrew $$53,000$ from the business and received a $$5,000$ guaranteed payment.

Requirements:

Complete the A&B Salon$$s Form $1065$ for $2020$ and Amy$$s K$-1.$ Do not complete any other schedules. Assume all the responses to Schedule B are no$.$