Phil Williams and Liz Johnson are 60% and 40% partners, respectively, in Williams & Johnson Partnership. Their beginning basis is $33,000 for Phil and $31,000 for Liz. The partnership had the following activity during the year:

a. Calculate the ordinary income for the partnership and prepare page 1 of Form 1065. 

b. Prepare page 4 of Form 1065.

c. What is the ending basis for Phil Williams?

d. What is the ending basis for Liz Johnson?

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$336,123 Income 1,259 Interest income Dividend income (qualified) 4,586 Long-term capital gains 13,458 Total Revenue $355,426 Expenses: Salaries and wages (nonpartners) S47,000 Guaranteed payments Williams 75,000 Johnson 50,000 Depreciation (MACRS – includes $9,000 §179 expense) 41,888 Interest expense 5,220 Taxes and licenses 15,548 Meals and entertainment (100%) 15,257 5,254 Auto Insurance (non-partner health) 6,000 Accounting and legal 2,800 Repairs 1,200 Charitable contributions 2,500 Payroll penalties 500 Total Expenses $268,167 $ 87.259 Net Income