Question
Wild Water Outfitters operates a service business; the company generates its revenue by guiding tours down rivers in the Southeastern United States, and by renting
Wild Water Outfitters operates a service business; the company generates its revenue by guiding tours down rivers in the Southeastern United States, and by renting canoes, kayaks, and rafts to clients. The company began operations on January 1, 2015, also its date inception. The companys Federal EIN is 58-1534793. The companys address is 1753 Cheat Canyon Lane, Clayton, GA 30525. The companys partners are Alan Moore, 257-89-1864, who lives at 8531 Painted Rock Road, Clayton, GA 30525, and Gigi Buchanon, 256-31-8954, who lives at 448 James Street, Lula, GA 30554. During 2019, the company had the following revenues & expenses: Service Revenue $280,000 Qualified Dividends 1,800 Expenses: Salaries $100,000 Payroll Taxes 8,000 Rent 13,000 Permits 20,000 Charitable Contributions 1,000 Depreciation 9,000 Liability Insurance 14,000 Advertising 8,000 Meals & Entertainment 9,000 Auto & Truck Expenses 7,000 The partnerships internal accounting records are prepared on the cash basis of accounting. Additionally, Alan took $47,300 in partner draws, and Gigi took $47,000 in partner draws during the year. A comparative balance sheet for 2018 and 2019 is as follows: Account 12/31/18 12/31/19 Cash $20,000 $25,000 Canoes, Rafts & Kayaks 10,000 21,000 Passenger Buses 20,000 20,000 Accumulated Depreciation (14,000) (23,000) Payroll Taxes Payable 5,000 7,500 Notes Payable 10,000 16,000 Capital, Moore 9,500 ? Capital, Buchanon 11,500 ? Depreciation Expense for tax purposes is $16,800 ($11,000 of Sec. 179, the remainder is regular MACRS). Alans basis in the partnership at the end of 2018 was $17,000, and Gigis was $19,000. 1. Complete Form 1065, pages 1-5, all necessary Forms and Schedules, and Schedules K-1 for the partners. 2. Calculate each partners basis in the partnership as of 12/31/19.
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