Prepare a Form 1065 and appropriate schedules for AB Custom Saddles for tax year 2012 based upon the following facts:AB Custom Saddles is a Domestic LLC formed on 1/1/2004. It has assets of $125,000. Employer,ID #41-678910. It is located at 1601 Mill Road, Windriver, MN 56300. Business code *1234567.
AB has two equal owners, Alan Anderson, SSN 555-00-2211, address: 1112 Broadway Ave., Minneapolis, MN 56011. Alan works full-time for AB and is paid a guaranteed payment of $30,000 per year. His capital account and basis going into 2012 were both $10,000. And Bradley Bailey, SSN 470-31-0202, 1000 3rd St., Windom, MN 56011. He also has a basis and capital account of $10,000 going into 2012.
AB distributed $5,000 in cash, $2500 to each Alan and Bradley in 2012.
- Business information:
- Income from sales $175,000
- Cost of goods sold 38,000
- Rent expense 4,000
- Telephone expense 2,000
- Advertising 3,000
- Salaries to non-owners 27,000
- Taxes 2,400
- Depreciation from previous years (Line 17 4562) 1,000
- Repairs 1,000
AB sold stock for $11,000 on 2/1/12 that was purchased on 2/1/04 for $7,000.AB sold a machine that was fully depreciated on 3/1/12 for $4,000.AB bought and placed in service a used machinefor $8,000 on June 1, 2012 and wants to expense the entire amount in 2012 if possible.Complete part L of the K-1 for each partner.