Financial Analysis Report for Tax Evaders N' Trouble Partnership Firm

FINANCIAL ANALYSIS REPORT
This report is about the financial affairs of a Partnership Firm named “TAX EVADERS
N’ TROUBLE”, situated at 125 Shady Lane, Chapin, SC 29036. The firm functions as a
local accounting firm and specialises in preparing Tax Returns for its clients in the
USA. The firm’s Employer ID No. is 57-7429540 and it commenced business in 2010
and has been reporting its income on the CASH BASIS system of accounting.
The following are the details of the three partners –
S.No
. Partner’s Name Shareholding %
01. Al Sharky 35.00 %
02. Darth Tax Evader 35.00 %
03. When in Doubt Deduct Dave Deducter 30.00 %
The Income Statement and Balance Sheet of Tax Evaders N’ Trouble (TNT) for the
year ended 12/31/2017 is shown in the attached Excel Spreadsheet.
Depreciation in a Limited Partnership
TNT is a limited partnership entity as it has more than one person having an ownership
interest in the business. Each of the limited partners is entitled to TNT’s income,
expense and liability in direct proportion to his ownership percentage. Depreciation is
also an expense that is shown in the income statement of the limited partnership. In
combination with other expenses incurred by TNT, this is also subtracted from the
income of TNT to arrive at the business’s net income or loss.
Straight-Line Depreciation
Although there are several methods of depreciation which can be used by a limited
partnership such s TNT, the partners have decided to use Straight-line Depreciation
Method, the most common method of calculating the depreciation expense. TNT uses
this method on the basis of the economic life of an asset which is established by the IRS.