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Amy and Mitchell share equally in the profits, losses, and capital of the accrual basis AM Products LLC. Amy is a managing member of the LLC (treated as a general partner) and is a U.S. person. At the beginning of the current tax year, Amy's capital account has a balance of $300,000, and the LLC has debts of $200,000 payable to unrelated parties. The debts are recourse to the LLC, but neither of the LLC members has personally guaranteed them. Assume that all LLC debt is shared equally between the partners. The following information about AM's operations for the current year is obtained from the LLC's records. Ordinary income W-2 wages to employees Depreciation expense Interest income Short-term capital loss Long-term capital gain Charitable contribution (cash) Cash distribution to Amy Unadjusted basis of partnership depreciable property $900,000 200,000 300,000 4,000 6,000 12,000 4,000 20,000 1,600,000 Year-end LLC debt payable to unrelated parties is $140,000. If all transactions are reflected in her beginning capital and basis in the same manner.

Amy and Mitchell share equally in the profits, losses, and capital of the accrual basis AM Products LLC. Amy is a managing member of the LLC (treated as a general partner) and is a U.S. person. At the beginning of the current tax year, Amy's capital account has a balance of $300,000, and the LLC has debts of $200,000 payable to unrelated parties. The debts are recourse to the LLC, but neither of the LLC members has personally guaranteed them. Assume that all LLC debt is shared equally between the partners. The following information about AM's operations for the current year is obtained from the LLC's records. Ordinary income W-2 wages to employees Depreciation expense Interest income Short-term capital loss Long-term capital gain Charitable contribution (cash) Cash distribution to Amy Unadjusted basis of partnership depreciable property $900,000 200,000 300,000 4,000 6,000 12,000 4,000 20,000 1,600,000 Year-end LLC debt payable to unrelated parties is $140,000. If all transactions are reflected in her beginning capital and basis in the same manner.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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D2.

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Prepare Amy's capital account rollforward from the beginning to the end of the tax year. Capital account balance, beginning year Ordinary income Interest income Net long-term capital gain Less: Charitable contribution Cash distribution to Amy Capital account balance, end of year Amy's capital account differs from her basis only by the amount of her share of LLC
Transcribed Image Text:Prepare Amy's capital account rollforward from the beginning to the end of the tax year. Capital account balance, beginning year Ordinary income Interest income Net long-term capital gain Less: Charitable contribution Cash distribution to Amy Capital account balance, end of year Amy's capital account differs from her basis only by the amount of her share of LLC
Problem 10-48 (LO. 11) Amy and Mitchell share equally in the profits, losses, and capital of the accrual basis AM Products LLC. Amy is a managing member of the LLC (treated as a general partner) and is a U.S. person. At the beginning of the current tax year, Amy's capital account has a balance of $300,000, and the LLC has debts of $200,000 payable to unrelated parties. The debts are recourse to the LLC, but neither of the LLC members has personally guaranteed them. Assume that all LLC debt is shared equally between the partners. The following information about AM's operations for the current year is obtained from the LLC's records. Ordinary income W-2 wages to employees Depreciation expense Interest income Short-term capital loss Long-term capital gain Charitable contribution (cash) Cash distribution to Amy Unadjusted basis of partnership depreciable property $900,000 200,000 300,000 4,000 6,000 12,000 4,000 20,000 1,600,000 Year-end LLC debt payable to unrelated parties is $140,000. If all transactions are reflected in her beginning capital and basis in the same manner.
Transcribed Image Text:Problem 10-48 (LO. 11) Amy and Mitchell share equally in the profits, losses, and capital of the accrual basis AM Products LLC. Amy is a managing member of the LLC (treated as a general partner) and is a U.S. person. At the beginning of the current tax year, Amy's capital account has a balance of $300,000, and the LLC has debts of $200,000 payable to unrelated parties. The debts are recourse to the LLC, but neither of the LLC members has personally guaranteed them. Assume that all LLC debt is shared equally between the partners. The following information about AM's operations for the current year is obtained from the LLC's records. Ordinary income W-2 wages to employees Depreciation expense Interest income Short-term capital loss Long-term capital gain Charitable contribution (cash) Cash distribution to Amy Unadjusted basis of partnership depreciable property $900,000 200,000 300,000 4,000 6,000 12,000 4,000 20,000 1,600,000 Year-end LLC debt payable to unrelated parties is $140,000. If all transactions are reflected in her beginning capital and basis in the same manner.
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