1. For 2011, compete Aspen Ridge limited partnership's page 1 of Form 1065; Schedule K on page 4 of Form 1065; complete lines 1 and 2 of the Analysis of Net Income (Loss) on page 5 of Form 1065; schedules M-1 and M-2 on page 5 of Form 1065; and Mark Sullivan's Scheulde K-1.

2. The forms and schedules can be found at www.irs.gov

Facts:

Aspen Ridge was formed on 4/1/09 by Mark Sullivan, its general partner, and two other limited partners when they each contirbuted equal amounts of cash to start the business. Mark has 33.33% of profits and capital interest and thhe limited partners hold the remaining 66.66% of the profits and capital interests.

Income Statement for the Year Ended Dec 2012

Sales- 965,500

Sales returns and allowances- (9700)

COGS- (538,200)

Gross Profit from operations- 417,600

other Income:

interest from money market account- 3,200

gain from sale of photo- 34,000

Gross Income- 454,800

Expenses:

employee wages- 95,400

interest on A/P- 2,700

payroll and property tax- 10,800

supplies- 4,300

rent on retail building- 18,500

depreciation on furniture- 4,550

advertising- 8,300

guaranteed payment to Mark- 35,000

utilities- 6,400

accounting and legal services- 4,400

meals and entertainment- 2,240

charitable contributions- 3,300

misc exp- 5,750

total exp- (201,640)

Net Income for Books-$ 253,160

Notes:

1. Aspen Ridge has total assets of $1,725,800 and total liabilities of $540,300 at the beginning of the year and total assets of $2,065,300 and total liabilities of $806,640 at the end of the year.

2. Partnership liabilities consist of A/P, and Mark, as general partner, is legally responsible for paying these liabilities if partnership cannot.

3. 2 years ago, Aspen Ridge purchased a photo with the intent to display it permanently in the store. This year, the photo was sold to a local ski lodge where it now hangs on the wall. The $34,000 recognized gain from the sal of the photo is reflected in the income statement above.

4. For tax purposes, Aspen Ridge has consistently elected under Section 179 to expense any furniture or fixtures purchased every year. As a result, it does not have a tax basis in any of its depreciable assets. This year, Aspen Ridge expenses $17,300 of signs and display cases for tax purposes.

5. On Nov. 20th, Aspen Ridge distributed $180,000 ($60,000 each partner) to the partners.

6. Misc. expenses include a $900 fine for violating a local signage ordinance.

7. Aspen Ridge maintains its books using GAAP.