Partnership problem T$/$R problem:

Amy Jones and Doug Brown formed Amy$-$Doug Partnership on January $1,2019,$ with cash investments of $$120,000$ and $$80,000$ for $60\%$ and $40\%$ respective interests in both the partnership$$s capital and income. The partnership operates a retail sales business, reports on the calendar year, and uses the accrual method.$$ From the data below, compute the partnership$$s $2023$ ordinary business income and list the items which will be separately reportable by their partners on their individual returns. Complete Form $1065$ page $1,$ Schedule K and K$-1$s for each of the partners.

$1.$ All sales were made on account, $$250,000.$

$2.$ Sales of $$4,800$ were returned for allowances, $$235,000$ was received as payments on account.$$

$3.$ Inventory on January $1,2022,$ was $$64,500$; purchases for $2023$ were $$82,500$; ending inventory, $$37,000.$

$4.$ The partnership uses the specific write$-$off method of accounting for bad debts. $$1,500$ in uncollectible accounts was written off.

$5.$ Depreciable assets held by the partnership were as follows:

a$.$ Building $$ cost $$131,689$; acquired in $2019$; cost recovery in $2023$ $$3,377.$

b$.$ Machinery $$ cost $$20,000$; seven$-$year recovery property; placed into service December $20,2023$; $$20,000$ immediately expensed under Code Sec. $179.$

$6.$ Dividends received: $$1,000$ from Domestic Corp.; $$750$ from Foreign Corp. on which $30\%$ tax was withheld at source.

$7.$ Sold on November $29,2023,600$ shares Domestic Corp. common stock for $$8,500$; $1,000$ shares were purchased on December $2,2019$ for $$10,000.$

$8.$ Sold on November $11,2023,300$ shares Foreign Corp. preferred stock for $$2,200$; $800$ shares were purchased on December $12,2022,$ for $$3,000.$

$9.$ Sold on January $1,2023,$ for $$6,325,$ equipment which was purchased in $2019$ for $$3,200$ on which cost recovery of $$1,801$ had been previously taken.

$10.$ Organization costs of $$3,000$ are being amortized for financial purposes over a $10-$year period. Amy$-$Doug did not deduct any of these expenses, but amortized them over the shortest possible period for tax purposes.

$11.$ $$10,000$ principal and $$6,000$ interest were paid on the partnership$$s mortgage.

$12.$ A $$400$ cash contribution was made to the American Red Cross.

$13.$ Salary Expense for employees was $$50,000.$ All $$50,000$ was W$-2$ wages.

$14.$ Rent was $$12,000$; real estate taxes, $$2,500.$

$15.$ During $2022,$ Amy and Doug took cash withdrawals of $$50,000$ and $$25,000$ respectively.