Question

Eileen and Sarah begin the bean Buzz Coffee Shop in 2016 as equal Partners in 2016. their financial records indicated the following: 113582 in grocery receipts, 30,467in purchases, 3042 in the beginning inventory, 2788 in inventory at the end of 2018, 21 594 in salaries to the Baristas, 6429 in general supplies, 84064 business insurance, 3599 for a new office desk purchase on July 1st 2018 for which they did not elect bonus depreciation or Section 179 deduction. Eileen and Sarah did not take any distributions in 2018 however they each have a guaranteed payment as a result of the capital they've contributed. Eileen receives $10,000 and Sarah receives $12,000. what is the cost of goods sold for the Bean Buzz for 2018 and what is the amount of their ordinary income or loss?

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ceipts entory 2. 521 594 in 6429 in general supplies S846 for business insurance $3,599 for a new office desk p 179 deduction Eileen and Sara did not take any dist capital they contributed. Eileen rece Buzz for 2018 and what is the amou Form 1125-A, line 8-$30,721 Form 1065, line 22- $31,478 OForm 1125-A, line 8- $52,315 Form 1065, line 22- $31,478 Form 1125-A, line 8-$30,721 Form 1065, line 22- $53,478 Form 1125-A, line 8-$52,315 Form 1065, line 22-$53,478 Mark for follow up Question75 of 75

Answer 1

Answer option C is correct answer

Explanation for this :

COGS = Opening stock + Purchase - Closing Stock

= 3042+30467-2788 = 30721

Normal Profit= sales- cogs- other expenses

=113582-30721-29383 =53478