Aaron, Deanne, and Keon formed the Blue Bell General Partnership at the beginning of the current year. Aaron and Deanne each contributed $124,000 and Keon transferred an acre of undeveloped land to the partnership. The land had a tax basis of $56,000 and was appraised at $180,000. The land was also encumbered with a $56,000 nonrecourse mortgage for which no one was personally liable. All three partners agreed to split profits and losses equally. At the end of the first year, Blue Bell made a $7,200 principal payment on the mortgage. For the first year of operations, the partnership records disclosed the following information:
Aaron, Deanne, and Keon formed the Blue Bell General Partnership at the beginning of the current year. Aaron and Deanne each contributed $124,000 and Keon transferred an acre of undeveloped land to the partnership. The land had a tax basis of $56,000 and was appraised at $180,000. The land was also encumbered with a $56,000 nonrecourse mortgage for which no one was personally liable. All three partners agreed to split profits and losses equally. At the end of the first year, Blue Bell made a $7,200 principal payment on the mortgage. For the first year of operations, the partnership records disclosed the following information:
Chapter21: Partnerships
Section: Chapter Questions
Problem 43P
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![Required information
[The following information applies to the questions displayed below.]
Aaron, Deanne, and Keon formed the Blue Bell General Partnership at the beginning of the current year. Aaron and
Deanne each contributed $124,000 and Keon transferred an acre of undeveloped land to the partnership. The land had a
tax basis of $56,000 and was appraised at $180,000. The land was also encumbered with a $56,000 nonrecourse
mortgage for which no one was personally liable. All three partners agreed to split profits and losses equally. At the end of
the first year, Blue Bell made a $7,200 principal payment on the mortgage. For the first year of operations, the partnership
records disclosed the following information:
$ 480,000
470,000
70,000
1,500
600
Sales revenue
Cost of goods sold
Operating expenses
Long-term capital gains
§1231 gains
Charitable contributions
300
Municipal bond interest
Salary paid as a guaranteed payment to Deanne (not
included in expenses)
300
3,000
c. Using the information generated in answering parts (a) and (b), prepare Blue Bell's page 1 and Schedule K to be included with its
Form 1065 for its first year of operations, along with Schedule K-1 for Deanne. (Use 2021 tax rules regardless of year on tax form.
Percentages should be rounded to two decimal places. Losses should be entered as negative numbers and input all other values
as positive numbers.)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F00036db5-9718-4ee7-bb7b-0bc01f7bb13c%2Ff48ca082-9204-4105-ba1c-48b0cb49f9ed%2F7dw3jne_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Required information
[The following information applies to the questions displayed below.]
Aaron, Deanne, and Keon formed the Blue Bell General Partnership at the beginning of the current year. Aaron and
Deanne each contributed $124,000 and Keon transferred an acre of undeveloped land to the partnership. The land had a
tax basis of $56,000 and was appraised at $180,000. The land was also encumbered with a $56,000 nonrecourse
mortgage for which no one was personally liable. All three partners agreed to split profits and losses equally. At the end of
the first year, Blue Bell made a $7,200 principal payment on the mortgage. For the first year of operations, the partnership
records disclosed the following information:
$ 480,000
470,000
70,000
1,500
600
Sales revenue
Cost of goods sold
Operating expenses
Long-term capital gains
§1231 gains
Charitable contributions
300
Municipal bond interest
Salary paid as a guaranteed payment to Deanne (not
included in expenses)
300
3,000
c. Using the information generated in answering parts (a) and (b), prepare Blue Bell's page 1 and Schedule K to be included with its
Form 1065 for its first year of operations, along with Schedule K-1 for Deanne. (Use 2021 tax rules regardless of year on tax form.
Percentages should be rounded to two decimal places. Losses should be entered as negative numbers and input all other values
as positive numbers.)
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