Mary and Martha, Who Had Been Friends for Years, Decided

question 93

Essay

Mary and Martha, who had been friends for years, decided to open a retail store to sell kitchen and bath items. In June, they spent $500 looking for a suitable location. They paid an attorney $1,500 to have their partnership agreement drawn up, and they paid an accountant $400 to set up their accounting system. During July, they searched for vendors for the merchandise they planned to carry and stocked their shelves. The store opened in August and was immediately successful. They paid the accountant $300 to prepare an income statement for August. What tax issues should the partnership consider with regard to beginning this business?

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Definitions:

Proprioceptors

Sensory receptors located in the muscles, tendons, and joint capsules that help to provide a sense of body position and movement.

Dermis

The layer of skin situated beneath the epidermis, containing nerve endings, sweat glands, and blood vessels.

Aqueous

Relating to water; typically refers to solutions or environments where water is the solvent.

Anterior Chamber

The fluid-filled space inside the eye between the iris and the cornea's innermost surface, playing a role in maintaining intraocular pressure.