In: Accounting
Eileen in Sara did not take any distributions for 2018. However they each have a guaranteed payment as a result of the capital they contributed. Eileen receives $10000 Sara receives $12000. What is the cost of goods sold for the bean buzz for 2018 in what is the amount for their ordinary income or loss?
Answer:
Form 1125-A, line 8 - $30,721; Form 1065, line 22 - $31,478
Explanation:
Cost of goods sold - Form 1125-A, line 8
Particulars | Amount (in $) |
1 Inventory at beginning of year | 3,042 |
2 Purchases | 30,467 |
3 Cost of labor | 0 |
4 Additional section 263A costs | 0 |
5 Other costs | 0 |
6 Total. Add lines 1 through 5 | 33,509 |
7 Inventory at end of year | 2,788 |
8 Cost of goods sold. Subtract line 7 from line 6. | 30,721 |
.
Ordinary Income or loss - Form 1065, Line 22
Particulars | Amount (in $) |
1 Gross receipts or sales | 113,582 |
2 Cost of goods sold (attach Form 1125-A) | 30,271 |
3 Gross profit. Subtract line 2 from line 1 | 82,861 |
8 Total income (loss) | 82,861 |
9 Salaries and wages (other than to partners) | 21,594 |
10 Guaranteed payments to partners | 22,000 |
16 Depreciation (Office desk is depreciated for 7 years) | 514 |
20 Other deductions (Supplies + Insurance) | 7,275 |
21 Total deductions. Add the amounts shown in the far right column for lines 9 through 20 | 51,383 |
22 Ordinary business income (loss). Subtract line 21 from line 8 | 31,478 |
Cost of goods sold for the Bean Buzz for 2018 = $30,721
Ordinary Income = $31,478
The answer is Form 1125-A, line 8 - $30,721; Form 1065, line 22 - $31,478