Question

Lloyd and Harry, equal partners, form the Ant World Partnership. During the year, Ant World had the following revenue, expenses, gains, losses, and distributions:

Cost of Goods Sold	$	85,000
Cash Distribution to Harry	$	15,000
Municipal Bond Interest	$	1,500
Short-Term Capital Gains	$	4,500
Employee Wages	$	40,000
Rent	$	10,000
Charitable Contributions	$	25,000
Sales	$	175,000
Repairs and Maintenance	$	5,000
Long-Term Capital Gains	$	12,000
Fines and Penalties	$	5,000
Guaranteed Payment to Lloyd	$	25,000

Given these items, what amount of ordinary business income (loss) and what separately-stated items should be allocated to each partner for the year? Enter negative numbers with a minus sign, for example -1000.

Ordinary business income (loss) allocated to Lloyd

Ordinary business income (loss) allocated to Harry

TOTAL separately stated items allocated to Lloyd

TOTAL separately stated items allocated to Harry

Answer 1

	Particulars	Amount ($)
1	Sales	175,000
2	Cost of Goods Sold	-85,000
3	Net Income from sale of goods (1-2)	90,000
3	Net Income from sale of goods	90,000
4	Short-Term Capital Gains	4,500
5	Municipal Bond Interest	1,500
6	Long-Term Capital Gains	12,000
A	Total Income (3-6)	108,000
7	Employee Wages	-40,000
8	Rent	-10,000
9	Charitable Contributions	-25,000
10	Repairs and Maintenance	-5,000
11	Fines and Penalties	-5,000
B	Total Expenses (7-11)	-85,000
C	Cash Distribution to Harry	-15,000
D	Guaranteed Payment to Lloyd	-25,000
E	Net Loss (A+B+C+D)	-17,000
	Ordinary business loss allocated to Harry (E/2)	-8,500
	Ordinary business loss allocated to Lloyd (E/2)	-8,500