00:01
4 part at part 1 we need to calculate the ordinary income.
00:06
So, for this the formula is sales revenue minus cost of goods sold minus operating expenses minus guaranteed payment minus depreciation expenses minus section 179 expenses.
00:31
So, from the given information, let's put the values here.
00:36
This is $450 ,000 minus $130 ,000 minus $1 ,00 ,000 minus $45 ,000 minus $50 ,000 minus $25 ,000.
00:56
So, when we calculated, we got the amount exact $1 ,00 ,000.
01:02
So, this is our answer for part a.
01:05
Now, let's move toward part b.
01:07
Here, we have to find the items that rachel, which is 40 % of owner, rachel who is 40 % owner must report on her 1040r.
01:20
So, guaranteed payment of her services will be $45 ,000.
01:28
Cash distribution for each partner will be $20 ,000 as given to the their deed.
01:36
Now, let's move towards the next part of the question, which is c.
01:39
We have to calculate the amount of rachel's earning.
01:44
Rachel's earning.
01:46
So, how we can calculate the amount earning is the 40 % of ordinary income...