Accounts: Balance Sheet and Dapper-dons Partnership

Topics: Balance sheet, Expense, Asset Pages: 4 (968 words) Published: March 2, 2013
C9-57 The Dapper-Dons Partnership (employer identification no. 89-3456798) was formed ten years ago as a general partnership to custom tailor men’s clothing. Dapper-Dons is located at 123 Flamingo Drive in Miami, Florida 33131. Bob Dapper (Social Security No. 654-32-1098) manages the business and has a 40% capital and profits interest. His address is 709 Brumby Way, Miami, Florida 33131. Jeremy Dons (Social Security No. 354-12-6531) owns the remaining 60% interest but is not active in the business. His address is 807 9th Avenue, North Miami, Florida 33134. The partnership values its inventory using the cost method and did not change the method used during the current year. The partnership uses the accrual method of accounting. Because of its simplicity, the partnership is not subject to the partnership audit procedures. The partnership has no foreign partners, no foreign transactions, no interests in foreign trusts, and no foreign financial accounts. This partnership is neither a tax shelter nor a publicly traded partnership. No changes in ownership of partnership interests occurred during the current year. The partnership made cash distributions of $155,050 and $232,576 to Dapper and Dons, respectively, on December 30 of the current year. It made no other property distributions. Financial statements for the current year are presented in Tables C9-1 and C9-2. Assume that Dapper-Dons’ business qualifies as a U.S. production activity and that its qualified production activities income is $600,000. The partnership uses the small business simplified overall method for reporting these activities (see discussion for Line 13d of Schedules K and K-1 in the Form 1065 instructions).

Prepare a current year partnership tax return for Dapper-Dons Partnership. ISBN: 0-536-35834-6
Prentice Hall's Federal Taxation 2007: Comprehensive, by Thomas R. Pope, Kenneth E. Anderson, and John L. Kramer, eds. Published by Prentice Hall. Copyright ©...
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