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Emily Jackson (Social Security number 765-12-4326) and James Stewart (Social Security number 466-74-9932) are partners in...

Emily Jackson (Social Security number 765-12-4326) and James Stewart (Social Security number 466-74-9932) are partners in a partnership that owns and operates a barber shop. The partnership's first year of operation is 2017. Emily and James divide income and expenses equally. The partnership name is J&S Barbers, it is located at 1023 Broadway, New York, NY 10004, and its Federal ID number is 95-6767676. The 2017 financial statements for the partnership are presented below.

J&S Barbers

Income Statement for the Year Ending December 31, 2017

Gross income from operations ....................$372,300

Deductions:

Salaries to employees...................... 94,600

Payroll taxes..................................... 14,500

Supplies.............................................. 9,000

Rent.................................................. 41,000

Depreciation........................................ 5,100

Short-term capital loss .........................2,000

Charitable contributions............................500

Net income...................................................... $205,600

Partners' withdrawals (each partner)......................... $80,000

J&S Barbers

Balance Sheet as of December 31, 2017

Assets:

Cash ......................................................................$100,450

Accounts receivable .................................................10,000

Equipment.................................. $32,000

Accum. depreciation..................... (5,100)

.................................................................................26,900

..........................................................................................$137,350

Liabilities and Capital:

Accounts payable .................................................................$29,750

Notes payable ........................................................................22,000

Partners' capital ($20,000 contributed by each partner)........... 85,600

...............................................................................................$137,350

Emily lives at 456 E. 70th Street, New York, NY 10006, and James lives at 436 E. 63rd Street, New York, NY 10012.

Required:

Complete J&S Barbers' Form 1065 and Emily and James' Schedule K-1. Do not fill in Schedule D for the capital loss, Form 4562 for depreciation, or Schedule B-1 related to ownership of the partnership. Make realistic assumptions about any missing data.

Expert Solution

*Hope the above explanation helps, please comment if further explanation is required. Your rating is appreciated*

jeff jeffy answered 2 years ago

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