Question

Turtle Creek Partnership had the following revenues, expenses, gains, losses, and distributions:

Sales revenue                                                                                                $39,000

Long-term capital gains                                                                                    $2,000

Cost of goods sold                                                                                       ($13,000)

Depreciation - MACRS                                                                                   ($5,000)

Amortization of organization costs                                                                ($1,000)

Guaranteed payments to partners for general management                  ($10,000)

Cash distributions to partners                                                                        ($2,000)

     

Given these items, what is Turtle Creek’s ordinary business income (loss) for the year?

Answer 1

Answer:

Statement showing Turtle Creek’s ordinary business income (loss) for the year

Particulars	Amount $
Sales revenue	39,000
Less:
Cost of goods sold	-13,000
Depreciation - MACRS	-5,000
Amortization of organization costs	-1,000
Guaranteed payments	-10,000
Ordinary Business Income	$    10,000