Batman and Bane have decided to be friends and end their feud. They feel there is enough money to be made merchandising then fighting. They decide to form the B&B Boutique. They are unsure what form needs to be completed at the end of 2011. They started this partnership on February 1, 2011. The address for the business is 911 Batman Drive, Gotham, NY 10235. The EIN is 23-4567890. The business code is 7370 and would be retail.
The calendar year, cash basis partnership's December 31, 2011, balance sheet and trial balance are as follows:
Balance Sheet 12/31/11 Trial Balance 12/31/11
Debit Credit Debit Credit
Cash 12,000 22,000
Note Rec 14,000 14,000
Equip 150,000 150,000
Liab 104,000 104,000
Batman Cap 36,000 36,000
Bane Cap 36,000 36,000
Revenues 238,500
Int Inc. 1,400
Compensation 110,000
Rent Exp 14,000
Int. Exp 16,600
Ad. Exp 2,300
Payroll Exp 13,800
Repair Exp 5,800
MACRS Dep 25,500
Prop. Ins. 1,500
Office Supp. 3,000
Utility Exp 2,200
Charitable Contribution 1,500
Total 176,000 176,000 464,600 464,400
1. Compensation is composed of guaranteed payments of $20,000 each to Batman and Bane.
2. Distributions of $10,000 were made to each partner as well.
Prepare a 2011 Form 1065, Schedule K, Schedule L and a K-1 for each partner using the 2011 fo