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ANDY (50% partner) -

ANDY 1/1/22 basis is $101,000.

BILLY (50% partner)

BILLY 1/1/22 basis is $133,000

ANDY contributed $20,000 cash to the partnership on 12/3/22.

BILLY withdrew $5,000 from the partnership on 8/1/22.

Both partners are general partners.

The partnership utilizes the cash method of accounting.

The partnership has total assets at 12/31/22 of $221,922

This is not a publicly traded partnership.

On 1/2/22, the partnership purchased $25,000 of computer equipment. The computer equipment is being depreciated for book purposes utilizing straight-line, over 10 years. The computer equipment is utilized 100% for business.

Income Statement

For the year ended 12/31/22

Revenue:

Service Sales $ 390,000

Long Term Capital Loss (7,000)

Municipal Bond Interest Income 2,000

Dividend Income (ordinary & qualified) 5,000

Total Revenues $ 390,000

Expenses:

Advertising $ 12,000

Salaries 105,000

Supplies 1,700

Travel 8,570

Seminars and Training 3,250

Interest Expense - Business Loan 12,500

Interest Expense - used to purchase Municipal Bonds 1,000

Meals 2,150

Entertainment 4,250

Fines & Penalties 1,000

Guaranteed Payments - ANDY 52,000

Guaranteed Payments - BILLY 52,000

Auto leases 950

Charitable Contributions 20,000

Payroll taxes 7,650

Repair & Maintenance 700

Professional fees 6,000

Rent 24,000

Communications 4,330

Utilities 3,780

Miscellaneous 555

Depreciation 2,500

Total Expenses 325,885

Net Income $64,115

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