5. Which of the following itemsdo not retain their character asthey flow through to thepartnership? More than oneanswer may be correct.a. Long-term capital gains.b. Short-term capital gains.c. Depreciation recaptureincome.d. Dividend income.6. Sal and Nan owned 90% and10% of the SN Partnership,respectively. SN operated afoundry. Sal sold stock inExxonMobil with a basis of$4,000 to the partnership for$6,000. The amount andcharacter of gain recognized toSal is:a. $0.b. $2,000 ordinary.c. $2,000 capital gain.d. $6,000 ordinary.7. Sal and Nan owned 90% and10% of the SN partnership,respectively. SN operated afoundry. Sal sold a machine,capital asset to him but to beused in the SN businessoperations, with a basis of $4,000to the partnership for $6,000. Theamount and character of gainrecognized to Sal is:a. $0.b. $2,000 ordinary.c. $2,000 capital gain.d. $6,000 ordinary.

5. Which of the following items do not retain their character as they flow through to the partnership? More than one answer may be correct. a. Long-term capital gains. b. Short-term capital gains. c. Depreciation recapture income. d. Dividend income.

5. Which of the following items do not retain their character as they flow through to the partnership? More than one answer may be correct. a. Long-term capital gains. b. Short-term capital gains. c. Depreciation recapture income. d. Dividend income.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: Which one of the following is a gain to the partnership firm? a. Interest on loan from bank b.…

A: Partnership firm is considered as a separate entry from its partnership. So even when interest on…

Q: The basis for dividing partnership net income or net loss is referred to as any of the following…

A: The ratio in which the net income or net loss is divided among the partners is agreed upon in the…

Q: Question: True or False 1) According to the Partnership Act, the profit of the partnership business…

A: Partnership is a contract or agreement between two or more than two persons. This is one of the form…

Q: 8 Which of the following ratio helps the partners to determine the amount of compensation to be…

A: Ans. When a new partner is admitted to a partnership, the new partner need to pay compensation to…

Q: What is a key distinction in the presentation of the Income Statement in a Partnership

A: Income statement shows the net income or net loss that is calculated by deducting the expenses from…

Q: In answering Partnership Operation problems, explain the detailed process of the following bases for…

A: Partnership: It is a form of business under it two or more persons made a formal agreement with the…

Q: Identify the suitable rule for ascertaining sacrifice of old partners on admission of a new partner?…

A: Partnership business includes partners who join hands to share profit and losses in an agreed ratio.…

Q: Which of the following methods are used to calculate the estimated profit up to the date of death of…

A: When a partner dies in partnership firm , his heirs are entitled to the amount due and the rights…

Q: When can partnership/S corporation income can be used. Choose best answer A) Rental income and…

A: (1) S corporation is considered as a closely held corporation by the Internal Revenue Code (IRC) of…

Q: How would you advise the partners in developing a method for dividing income?

A: Partnership: Partnership is firm where two or more persons come together to business to share the…

Q: When there is a capital deficiecy, the effect is that a. the cash and other assets will also be…

A: Ans. Whenever there happens a case of capital deficiency, the assets are less as compared to the…

Q: Which of the following items may be subject to the sef-employmant tax? A partners distributive…

A: The self-employment tax is a tax on net earnings from self-employment, which includes income from a…

Q: Nonrecourse debt is generally allocated according to the profit-sharing ratios of the partnership.…

A: Partnership is a form of business organization wherein two or more persons come together to do…

Q: Which of the following items is generally reported separately on a partnership return?

A: Step 1 A partnership is an arrangement by two or more individuals or parties to carry on the…

Q: limited partner as to the contribution of profits? Article 1856.

A: Partnership is the form of Business firm where two or more partners shares profits and losses in…

Q: The amount taken from the business by the partners for their personal use is called: a.Interest on…

A: The amount taken from the business by the partners for their personal use is called Drawings..Option…

Q: None

A: Partners typically when it comes allocating the share of profit and expenses to each of partner…

Q: P is allocated his distributive share of a partnership's ordinary income. The effect of this is: a.…

A: An increase in a partner's share of partnership liability is treated as a contribution of money by…

Q: Which type of taxpayer cannot be a partner in a partnership? a non-resident alien a C corporation a…

A: Hi student Since there are multiple questions, we will answer only first question.

Q: Statement I: Partners with the greatest ability to absorb losses and expenses are the first to…

A: A partnership is a kind of business structure in which two or more people agree to carry out…

Q: The basis of a partner's partnership interest is decreased by

A: In a partnership, a partner's basis in their partnership interest is a critical financial concept.…

Q: Where in the Current Account would the Share of Loss be found? A. Debit side B. Credit side C. Not…

A: In partnership accounting, we prepare the partner's capital account by two methods. The first is the…

Q: _________ is the consideration which new partner pays to the old partners for the right to…

A: Lets understand the meaning of goodwill here. We all know that, when new partner enters in the…

Q: When a partner withdraws from a partnership, why is the final distribution often based on the…

A: Definition: Partnership: This is the form of business entity that is formed by an agreement,…

Q: . If the proceeds from the sale is less that the book value of the non-cash assets sold, this will…

A: Solution: When Proceed from sale of non cash assets is less than book value that means there is loss…

Q: Net income for a partnership has to be allocated based on stated ratios. Question 2 options:…

A: Partnership is one of the form of business organisation under which two or more than two persons…

Q: partnership final accounts?

A: Correct answer :- a Adjustments will be recorded have dual effects in the income statement and…

Q: determine whether an allocation had a substantial economic effect on the partners, the courts have…

A: Partnership allocation: Partnership allocation can be defined as a process of distribution of…

Q: Which of the following case where the losses are to be shared by the partners in their profit…

A: Ans. Loss on Dissolution of firm is shared on the basis of capital introduced by partners.…

Q: How does a newly formed partnership handle the contribution of previously depreciated assets?

A: A partnership is a form of business organization under which two or more than two join together to…

Q: Vhen a partner invests noncash ssets in a partnership, the assets hould be recorded at their * O…

A: The partnership comes into existence when two or more persons agree to do the business and further…

Q: Which one of the following is not an advantage of partnership? a. Less profit because profit is…

A: solution: Following are the advantage of partnership: 1. Increased capital 2. Increased knowledge…

Question

5. Which of the following items
do not retain their character as
they flow through to the
partnership? More than one
answer may be correct.
a. Long-term capital gains.
b. Short-term capital gains.
c. Depreciation recapture
income.
d. Dividend income.
6. Sal and Nan owned 90% and
10% of the SN Partnership,
respectively. SN operated a
foundry. Sal sold stock in
ExxonMobil with a basis of
$4,000 to the partnership for
$6,000. The amount and
character of gain recognized to
Sal is:
a. $0.
b. $2,000 ordinary.
c. $2,000 capital gain.
d. $6,000 ordinary.
7. Sal and Nan owned 90% and
10% of the SN partnership,
respectively. SN operated a
foundry. Sal sold a machine,
capital asset to him but to be
used in the SN business
operations, with a basis of $4,000
to the partnership for $6,000. The
amount and character of gain
recognized to Sal is:
a. $0.
b. $2,000 ordinary.
c. $2,000 capital gain.
d. $6,000 ordinary.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

1. What is KW Partnership’s ordinary business income (loss)? 2. Which of the following items are separately stated?
Attempt of the following:a. Revenue vs capital expenditureb. Accelerated depreciation methodc. Procedure for the formation of partnership.
7) Which one of the following is a gain to the partnership firm? a. Interest on drawings b. Interest on loan from bank c. Interest on capital d. Withdrawal of capital
1. How does the statements of financial position of a proprietorship differ from that for a partnership?
is it true or false? Explain Unless stated otherwise,in the partnership contract,profits and losses are shared among the partners in the ratio of their capital equity balances.
Ma1. TRUE /FALSE in computing a partnerships business income the amount that can be claimed as CCA follows the very same rules that apply to other taxpayers
. How are “advances or drawings of money or property against a partner’s distributive share of income” treated?
Discuss the rule as to the share of profits and losses of the partners among themselves.
True or False Interests based on partners' capital are provided only during periods of positive results of operations, not during periods of losses.
1. %3D 1. Problem 1: Ted. Ronald and Geno formed a partnership, whereby each of them contributed P30.000.00 They agreed that should the partnership realize profit, the same shall be distributed in the following proportions: Ted, as managing partner Ronald 40% 30% 30% Geno After a year of operation, the partnership's profit amounted to P100,000.00. How much will be the share of each partner? 37