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Elijah and Rona are both 50-percent partners in the Thakkar Partnership. At the start of the current year, Elijah's outside basis in Thakkar is $3,000 and Rona's outside basis in Thakkar is $7,000. During the current year, the distributive share of income for both Elijah and Rona is $500. There are no separately stated items in the current year except for a cash distribution of $5,000 each to Elijah and Rona. Complete the statements below on the computation of Elijah and Rona's income and ending outside basis for the current year. Rona's beginning basis of $7,000 is first increased partnership income but then reduced in an ending basis of $ 2,500 ✔. Rona's current year income is $ 500 ✔. by $500 of by the $5,000 distribution resulting Elijah's beginning basis of $3,000 is also increased $5,000 distribution cannot decrease by $500 but the 0 his basis below $ X but he must treat $ and thus his ending basis is $ the distribution as income. Elijah's current year income is $ 1,500 of

Elijah and Rona are both 50-percent partners in the Thakkar Partnership. At the start of the current year, Elijah's outside basis in Thakkar is $3,000 and Rona's outside basis in Thakkar is $7,000. During the current year, the distributive share of income for both Elijah and Rona is $500. There are no separately stated items in the current year except for a cash distribution of $5,000 each to Elijah and Rona. Complete the statements below on the computation of Elijah and Rona's income and ending outside basis for the current year. Rona's beginning basis of $7,000 is first increased partnership income but then reduced in an ending basis of $ 2,500 ✔. Rona's current year income is $ 500 ✔. by $500 of by the $5,000 distribution resulting Elijah's beginning basis of $3,000 is also increased $5,000 distribution cannot decrease by $500 but the 0 his basis below $ X but he must treat $ and thus his ending basis is $ the distribution as income. Elijah's current year income is $ 1,500 of

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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Problem 10-13 Partnership Income Reporting (LO 10.3) Elijah and Rona are both 50-percent partners in the Thakkar Partnership. At the start of the current year, Elijah's outside basis in Thakkar is $3,000 and Rona's outside basis in Thakkar is $7,000. During the current year, the distributive share of income for both Elijah and Rona is $500. There are no separately stated items in the current year except for a cash distribution of $5,000 each to Elijah and Rona. Complete the statements below on the computation of Elijah and Rona's income and ending outside basis for the current year. Rona's beginning basis of $7,000 is first increased partnership income but then reduced in an ending basis of $ 500 ✓. by $500 of by the $5,000 distribution resulting 2,500 ✓. Rona's current year income is $ Elijah's beginning basis of $3,000 is also increased $5,000 distribution cannot decrease and thus his ending basis is $ the distribution as income. Elijah's current year income is $ by $500 but the 0 his basis below $ X but he must treat $ 1,500 of
Transcribed Image Text:Problem 10-13 Partnership Income Reporting (LO 10.3) Elijah and Rona are both 50-percent partners in the Thakkar Partnership. At the start of the current year, Elijah's outside basis in Thakkar is $3,000 and Rona's outside basis in Thakkar is $7,000. During the current year, the distributive share of income for both Elijah and Rona is $500. There are no separately stated items in the current year except for a cash distribution of $5,000 each to Elijah and Rona. Complete the statements below on the computation of Elijah and Rona's income and ending outside basis for the current year. Rona's beginning basis of $7,000 is first increased partnership income but then reduced in an ending basis of $ 500 ✓. by $500 of by the $5,000 distribution resulting 2,500 ✓. Rona's current year income is $ Elijah's beginning basis of $3,000 is also increased $5,000 distribution cannot decrease and thus his ending basis is $ the distribution as income. Elijah's current year income is $ by $500 but the 0 his basis below $ X but he must treat $ 1,500 of
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