FORM 1065 RETURN PROBLEMWilson and Walters are the members of Woody’s Widgets LLC. Wilson owns 40% and Walters owns 60%. They are both active in the business, working every day. Capital, profits and losses are shared in proportion to ownership. Woody’s is on the accrual basis of accounting and has a December 31 year end. Woody’s makes and sells widgets. It has no farm, oil or gas operations.Here is Woody’s 2013 Financial Information:Sales $7,500,000Returns 750,000Cost of Goods Sold 3,750,000Section 179 Election 150,000Depreciation 627,000Electricity 90,000Telephone 42,000Postage 20,000Health insurance 226,000Liability insurance 100,000Rent 900,000Meals & Entertainment 300,000AutomobileEmployees 60,000Members 40,000Life InsuranceEmployee Group Term (max. $50,000) 17, 250Members 25,000Contribution to Profit Sharing Plan 444,000Charitable ContributionsPublic Charities 120,000Private Foundations 20,000Dividends Received (publicly traded US) 200,000LT Capital Gain 100,000LT Capital Loss 60,000ST Capital Gain 25,000ST Capital Loss 75,000InterestUS corporate bonds 149,600Michigan bonds 20,000US Treasuries 25,000Each member’s draw is $20,000 per month. During 2013, each member received the following distributions:Cash $50,000PropertyWilson GE Stock FMV = $2,500Walters Computer, Truck, CNC machine Total FMV= $18,800As of January 1, Wilson’s capital account is 60,000 and Walter’s capital account is $100,000. No capital was contributed in 2013. Both are member-managers. They file their returns in with the Ogden, UT service center.The LLC has no foreign accounts. All of the employees are US citizens, as are Wilson and Walters.Please prepare the following:1065 Page 1Page 4 Schedule KSchedule D (Form 1065)Schedule K-1 for both Wilson and Walters (Extra Credit)

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