Question:
Please fill out Form 1065 partnership return and a Schedule K-1 for Priscilla and any necessary supporting schedules. Don't forget to include the necessary codes on the K-1.Funky Chicken General Partnership
Income Statement (Per Books)
For Year Ended 12/31/15
Additional Information:
1 For tax purposes, Funky Chicken always elects to Section 179 eligible property.
Funky Chicken does not have any Section 179 carryover to use.
For book purposes, Funcky Chicken uses straight-line depreciation.
On August 6, 2015, Funky Chicken purchased $46,000 of new office furniture.
On Sept. 25, 2015, Funky Chicken purchased $64,000 of equipment.
None of the depreciation is allocated to COGS (§263A).
2 Funky Chicken wrote off $40,000 in accounts receivable as uncollectible during the year.
3 Funky Chicken owns < 1% of the outstanding stock of Coca-Cola, Inc.
4 Other Business Expenses includes $2,500 for life insurance premiums on Priscilla Presley and Johnny Counterfeit for which Funky Chicken is the beneficiary.
5 Funky Chicken made cash distributions of $48,000 to Priscilla Presley and $112,000 to Johnny Counterfeit.
6 On July 21, 2015, Funky Chicken sold equipment used in its business for $120,000.
It originally purchased the equipment on February 10, 2011 for $150,000.
The book depreciation through the date of sale was $70,000, while the tax depreciation was $150,000.
7 Compensation was paid by Funky Chicken as follows:
8 Interest Expense of $97,000 was incurred for working capital loans, while $32,000 while was incurred on debt used to purchase State of Nevada bonds.
9 Qualified production activities income (QPAI) equals $2,824,100. Employer's wages allocable to U.S. production activities equal $800,000.
10 On September 2, 2015, Funky Chicken sold 1,000 shares of Abercrombie stock for $52 per share. It purchased the Abercrombie stock May 4, 2013 for $70 per share.
11 Warranty expense is estimated as a % of sales. Actual claims and amounts paid on these warranties totaled $130,000.
13 Funky Chicken started business on June 1, 2007 and incurred $48,200 in organizational costs. Funky Chicken made the election to immediately expense $5,000 with the remainder over 180 months.
Requirements:
1 Prepare Pages 1-5 of Form 1065 (and any necessary supporting schedules).
2 Complete a K-1 for Priscilla.
3 Form 4562 for depreciation is not required.
4 Form 4797 is not required.
Attachment:- funky-chicken-form.rar