You are a senior tax accountant in the firm, Ernest & Rainhouse. Joe, a new junior accountant, has just completed an interview with a new client Harry, who is a general partner of Widget Unlimited. Harry is seeking to have Ernest & Rainhouse prepare Widget Unlimiteds Partnership Tax Return. Joe has never prepared a Partnership Tax Return and seeks your help in doing so. Additionally, there are a couple of questions Harry asks that Joe needs your assistance in answering. You are to read the scenario below and then follow the instructions. Scenario Henry, Hunter, and Harry formed a partnership (Widget Unlimited) on January 1, 2020. Henry and Hunter each contributed $200,000 and Harry transferred a building he had purchased two years earlier to the partnership. The building had a tax basis of $150,000 and was appraised at $300,000. The building was also encumbered with a $100,000 mortgage. The partners plan to use the building to manufacture, distribute, and sell green and purple widgets. Harry will work full time operating the business for which he will receive guaranteed payments (not included in expenses) of $5,000 per month. Henry and Hunter will devote less than twelve days a year to the business. At the end of 2020, Widgets Unlimited had made $6,000 in mortgage principal payments. The partnership agreement specifies that Henry, Hunter, and Harry will share in income/loss in the ratio of 3:3:4. For the first year of operation, the partnership records disclose the following information: Sales revenue $820,000 Cost of goods sold $735,000 Operating expenses $65,000 Long-term capital gains $3,300 ~1231 gains $1,500 Charitable contributions $700 Political campaign donation $500 Municipal bond interest $450 Instructions Write a 3-5 page paper in which you do the following: Using the information provided, create a Form 1065: U.S. Return of Partnership Income 2020 for Widgets Unlimited, preparing a Schedule K for Henry, Hunter, and Harry. Refer to the completed Form 1065 schedule of Henry, Hunter, and Harry's adjusted tax basis immediately after partnership formation and at the end of the first year of operation