The Dapper-Dons Society was formed ten years ago as a unconcealed society to practice tailor men’s drapery. Dapper-Dons is located at 123 Flamingo Drive in City, ST, 54321. Bob Dapper manages the trade and has a 40% chief and profits share. His discourse is 709 Brumby Way, City, ST, 54321. Jeremy Dons owns the retaining 60% share but is not free in the trade. His discourse is 807 Ninth Avenue, City, ST, 54321. The partner-ship values its register using the consume rule and did not fluctuate the rule used during the vulgar year. The society uses the accrual rule of accounting. Because of its sincerity, the society is not material to the society audit procedures. The partner-ship has no extraneous partners, no extraneous transactions, no shares in extraneous trusts, and no extraneous financial accounts. This society is neither a tax security nor a publicly traded society. No fluctuates in holding of society shares occurred during the vulgar year. The society made money distributions of $155,050 and $232,576 to Dapper and Dons, respectively, on December 30 of the vulgar year. It made no other goods distributions. Financial narratements for the vulgar year are presented in Tables C:9-1 and C:9-2. Assume that Dapper-Dons’ trade qualifies as a U.S. evolution vital-force and that its adapted evolution activities pay is $600,000. Dapper-Dons, nature an desirable mean pass-through society, uses the mean trade simplified overall rule for reporting these activities (see discourse for Line 13d of Schedules K and K-1 in the Form 1065 instructions). Prepare a vulgar year (2015 for this quantity) society tax recur for Dapper-Dons Partnership.
TABLE C:9-1 Dapper-Dons Society Pay Statement for the 12 Months Ending December 31 of the Vulgar Year (Problem C:9-57) Sales $2,357,000Returns and allowances (20,000) $2,337,000Beginning register (FIFO rule)$ 200,050 Purchases624,000 Labor600,000 Supplies42,000 Other consumes a 12,000 Goods adapted for sale$1,478,050 Ending register b (146,000) (1,332,050)Gross profit $ 1,004,950Salaries for employees other than partners (W-2 stipend)$51,000 Guaranteed liquidation for Dapper85,000 Utilities outlay46,428 Depreciation (MACRS deterioration is $74,311) c 49,782 Automobile outlay12,085 Office supplies outlay4,420 Advertising outlay85,000 Bad liability outlay2,100 Interest outlay (all trade- or trade-related)45,000 Rent outlay7,400 Travel outlay (meals consume $4,050 of this equality)11,020 Repairs and defence outlay68,300 Accounting and allowable outlay3,600 Charitable contributions d 16,400 Payroll taxes5,180 Other taxes (all trade- or trade-related)1,400 Total outlays 494,115Operating profit $ 510,835
Other pay and losses: Gain on sale of AB store e $ 18,000 Loss on sale of CD store f (26,075) Sec. 1231 gain on sale of plant g 5,050 Interest on U.S. Treasury bills for unimpaired year ($80,000 aspect equality) 2,000 Dividends from 15%-owned domiciliary corporation11,000 9,975Net pay $ 520,810
a Additional Sec. 263A consumes of $7,000 for the vulgar year are moderate in other consumes. b Ending register includes the expend Sec. 263A consumes, and no excite conformation is needed to correctly narrate consume of sales and inventories for tax purposes. c The society reports a $10,000 confident AMT conformation for goods placed in advantage behind 1986. Dapper-Dons assumed and placed in advantage $40,000 of rehabilitation expenditures for a known unromantic goods this year. The expend MACRS deterioration on the rehabilitation expenditures already is moderate in the MACRS deterioration entirety. d The society made all contributions in money to qualifying charities. e The society purchased the AB store as an siege two years ago on December 1 for $40,000 and sold it on June 14 of the vulgar year for $58,000. f The society purchased the CD store as an siege on February 15 of the vulgar year for $100,000 and sold it on August 1 for $73,925. g The society used the plant as a parking lot for the trade. The society purchased the plant indecent years ago on March 17 for $30,000 and sold it on August 15 of the vulgar year for $35,050.
TABLE C:9-2 Dapper-Dons Society Balance Sheet for January 1 and December 31 of the Vulgar Year (Problem C:9-57) Balance January 1Balance December 31 Assets: Cash$ 10,000$ 40,000Accounts receivable72,600150,100Inventories200,050146,000Marketable securities a 220,000260,000Building and equipment374,600465,000Minus: Accumulated deterioration(160,484)(173,100)Land 185,000 240,000Total goods$901,766$1,128,000Liabilities and equities: Accounts payable$ 35,000$ 46,000Accrued salaries payable14,00018,000Payroll taxes payable3,4167,106Sales taxes payable5,2006,560Mortgage and notes payable (vulgar maturities)44,00052,000Long-term liability210,000275,000Capital: Dapper236,060289,334 Dons 354,090 434,000 Entirety liabilities and equities$901,766$1,128,000 a Short-term siege.
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