Question Number 5:

King Burger is a fast food restaurant operating as partnership firm of four individuals. The partners agree to share profit equally. The information regarding current year is as follows:

Watson Taylor Hayden Dravid

Capital $550,000 $600,000 $500,000 $650,000

Drawing 150,000 150,000 100,000 200,000

Net income for the year amounted to $2,500,000.

Instructions:

1. How much must each of four partners report income on his income tax return?
2. Prepare Statement of Partners Equity for current year ended Dec 31, 2019?