A and B form a partnership during the year. Each contributes $35,000 in cash. They share capital and profits 50-50. They share losses 70-30 respectively. The partnerships balance sheet was as follows on Dec. 31. The FMV and basis of all the assets are the same Cash 25,000 Debt 45,000 Receivables 15,000 A Capital 35,000 Equipment 75,000 B Capital 35,000 In computing their basis in their partnership interest how much debt will A and B include if the debt is non-recourse
Partnership Accounting
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings, admission of a new partner, etc.
Partner Admission and Withdrawal
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings of a partner, etc.
A and B form a
Cash 25,000 Debt 45,000
Receivables 15,000 A Capital 35,000
Equipment 75,000 B Capital 35,000
In computing their basis in their partnership interest how much debt will A and B include if the debt is non-recourse
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