Form 1065 Clutch Stuff LLC is an accrual basis company and

Form 1065 Clutch & Stuff, LLC is an accrual basis company and has a fiscal year end of January 31. During 2015, Clutch & Stuff had the following income and expenses:

$215,327 Cash Sales, $8,256 Credit Sales, $6,525 Interest Income - Expensess - $5,257 Returns and allowances, $30,000 Guaranteed payments, $24,000 Salaries (not associated with COGS), $750 Display Windows, $12,000 Rental fees, $5,025 Utilities, $4,290 Packaging, $3,525 Beginning inventory, $85,327 Purchases, $4,925 Ending Inventory.

1. What is the ordinary income (loss) reported on Form 1065,, line 22? A. $218,326, B. $224,851, C. .$68,716, ,D. $58,334

2. What is the gross profit for 2015? A. $230,108, B. $224,851, C. $134,399, D. $132,999

3. How much income (loss) is reported on Form 1065, Schedule K, Line 5? A. $0, B. $6,525, C. $5,256, D. $14,781

4. What is the net income (loss) reported on Form 1065, page 5, line 1? A. $132,999, B. $94,859 C. $58,334, D. $51,809

Solution

Answer

1 ) 58334

sales = 223583

less; returns and allowances = - 5257

cost of goods sold = - 83927

gross profit = 134399

less ; salaries = - 24000

guaranteed payments = - 30000

rental fees = - 12000

utilities = - 5025

display window = - 750

packaging = - 4290

ordinary income = 58334

2 ) 134399

gross income = 215327 + 8256 - 5257 - 3525 + 85327 - 4925

= 134399

3 ) 6525

interest income = 6525

4 ) 94859

ordinary income = 58334

add interest = 6525

guaranteed payment = 30000

net income = 94859