On January 1, 20X9, Mr

On January 1, 20X9, Mr. Blue and Mr. Grey each contributed $100,000 to form the B&G general partnership. Their partnership agreement states that they will each receive a 50% profits and loss interest. The partnership agreement also provides that Mr. Blue will receive an annual $36,000 guaranteed payment.
B&G began business on January 1, 20X9. For its first taxable year, its accounting records contained the following information. $\begin{array}{c}\begin{array}{lll}\text{Gross receipts from sales}\\\text{Cost of sales}\\\text{Gross profit}\\\\\text{Guaranteed payments to Mr. Blue}\\\text{Interest paid on business debt}\\\text{Dividend income}\\\text{Tax exempt interest}\\\text{Operating expenses}\\\text{Depreciation expense}\\\text{Sec. 1231 Gains}\\\end{array}\begin{array}{lll}&&\end{array}\begin{array}{r}\$ 150,000 \\(\$ 220,000) \\(\$ 70,000) \\\\(\$ 36,000) \\(\$ 3,000) \\\$ 500 \\\$ 1,500 \\(\$ 138,000) \\(\$ 9,000) \\\$ 8,000\\\end{array}\end{array}$