Lloyd and Harry, Equal Partners, Form the Ant World Partnership

question 91

Essay

Lloyd and Harry, equal partners, form the Ant World Partnership. During the year, Ant World had the following revenue, expenses, gains, losses, and distributions: $\begin{array}{lr}\text { Cost of Goods Sold } & \$ 85,000 \\\text { Cash Distribution to Harry } & \$ 15,000 \\\text { Municipal Bond Interest } & \$ 1,500 \\\text { Short-Term Capital Gains } & \$ 4,500 \\\text { Employee Wages } & \$ 40,000 \\\text { Rent } & \$ 10,000 \\\text { Charitable Contributions } & \$ 25,000 \\\text { Sales } & \$ 175,000 \\\text { Repairs and Maintenance } & \$ 5,000 \\\text { Long-term Capital Gains } & \$ 12,000 \\\text { Fines and Penalties } & \$ 5,000 \\\text { Guaranteed Payment to Lloyd } & \$ 25,000\end{array}$ Given these items, what amount of ordinary business income (loss) and what separately-stated items should be allocated to each partner for the year?

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Definitions:

Out

Positioned or situated beyond the limits or confines of a specified place or area.

Outer

Referring to the external part or surface of something.

Pericardial

Related to the pericardium, the membrane enclosing the heart.

Peri-

A prefix meaning around or near, used to denote vicinity to a specific body part or time relative to an event.