Bella Partnership is an equal partnership in which each of the partners has a basis in their partnership interest of$10,000. Bella reports the following balance sheet:Tax BasisFMV$ 20,000 $30,00010,000 15,000$ 30,000 $ 45,000AssetsInventoryLandTotalsLiabilities andcapitalCapital-TobyCapital-KaelinCapital-AndrewTotalsRequired:$ 10,00010,00010,000$ 30,000a-1. Identify the hot assets if Toby decides to sell his partnership interest.a-2. Are these assets "hot" for purposes of distributions?

"Hot" assets for the purpose of distribution are those assets which have substantially appreciated…

artnership is an equal partnership in which each of the partners has a basis in their partnership interest of O. Bella reports the following balance sheet: Tax Basis FMV $20,000 $30,000 10,000 15,000 $ 30,000 $ 45,000 ets entory d als bilities and ital ital-Toby ital-Kaelin ital-Andrew $ 10,000 10,000 10,000 $ 30,000 als ed: entify the hot assets if Toby decides to sell his partnership interest.

artnership is an equal partnership in which each of the partners has a basis in their partnership interest of O. Bella reports the following balance sheet: Tax Basis FMV $20,000 $30,000 10,000 15,000 $ 30,000 $ 45,000 ets entory d als bilities and ital ital-Toby ital-Kaelin ital-Andrew $ 10,000 10,000 10,000 $ 30,000 als ed: entify the hot assets if Toby decides to sell his partnership interest.

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter21: Partnerships

Section: Chapter Questions

Problem 25CE

See similar textbooks

Similar questions

The partnership of Tatum and Brook shares profits and losses in a 60:40 ratio respectively after Tatum receives a 10,000 salary and Brook receives a 15,000 salary. Prepare a schedule showing how the profit and loss should be divided, assuming the profit or loss for the year is: A. $40,000 B. $25,000 C. ($5,000) In addition, show the resulting entries to each partners capital account. Tatums capital account balance is $50,000 and Brooks is $60,000.
The partnership of Magda and Sue shares profits and losses in a 50:50 ratio after Mary receives a $7,000 salary and Sue receives a $6,500 salary. Prepare a schedule showing how the profit and loss should be divided, assuming the profit or loss for the year is: A. $10,000 B. $5,000 C. ($12,000) In addition, show the resulting entries to each partners capital account.
The partnership of Chase and Chloe shares profits and losses in a 70:30 ratio respectively after Chloe receives a $10,000 salary. Prepare a schedule showing how the profit and loss should be divided, assuming the profit or loss for the year is: A. $ 30,000 B. $ 6,000 C. ($10,000)
Arun and Margot want to admit Tammy as a third partner for their partnership. Their capital balances prior to Tammys admission are $50,000 each. Prepare a schedule showing how the bonus should be divided among the three, assuming the profit or loss agreement will be 1:3 once Tammy has been admitted and her contribution is: A. $20,000 B. $80,000 C. $50,000. In addition, show the resulting journal entries to each of the three partners capital accounts.
Juan contributes marketable securities to a partnership. The book value of the securities is $7,000 and they have a current market value of $10,000. What amount should the partnership record in Juans Capital account due to this contribution? A. $10,000 B. $7,000 C. $3,000 D. none of the above
1. Seth and Rachel have original investments of $50,000 and $100,000, respectively, in a partnership. The articles of partnership include the following provisions regarding the division of net income: interest on original investments at 15%; salary allowances of $24,000 and $20,000, respectively; and the remainder to be divided equally. How much of the net income of $90,000 is allocated to Seth? a.$47,750 b.$45,000 c.$42,750 d.$43,250 2. Seth and Beth have original investments of $50,000 and $100,000, respectively, in a partnership. The articles of partnership include the following provisions regarding the division of net income: interest on original investment at 10%; salary allowances of $27,000 and $18,000, respectively; and the remainder to be divided equally. How much of the net income of $42,000 is allocated to Seth? a.$32,000 b.$23,000 c.$20,000 d.$0 3. Tucker and Titus are partners who share income in the ratio of 3:1 (3/4 to Tucker and 1/4 to Titus). Their capital…
Jun Jon and Company, general co-partnership has the following data of income and expenses for 2018: Gross income- P 2,400,000 Expenses- 1,000,000 Dividend received from a domestic corporation 90,000 Interest on bank deposit (net)- 10,000 Partners Jun share profits and losses in the ratio of 80% and 20%, respectively. The income tax payable by the partnership is a. P420,000 b. P450,000 c. P447, 000 d. P423,000