January 31 of the current year, Marcy contributed the following to a partnership for a 30% interest: AB FMV Cash $ 60,000 $ 60,000 Accounts Receivable - 45,000 Inventory 30,000 50,000 Land 120,000 90,000 The partnership collected the receivables right away. The inventory was held as an investment by the partnership for two years, and then sold for $40,000. Marcy held the land as an investment but the partnership used it as a storage lot for its construction vehicles. The land was sold three years after the contribution for $80,000. a. What is the amount and character of gain on collection of the receivables?
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.
On January 31 of the current year, Marcy contributed the following to a partnership for a 30% interest:
AB FMV
Cash $ 60,000 $ 60,000
Inventory 30,000 50,000
Land 120,000 90,000
The partnership collected the receivables right away. The inventory was held as an investment by the partnership for two years, and then sold for $40,000. Marcy held the land as an investment but the partnership used it as a storage lot for its construction vehicles. The land was sold three years after the contribution for $80,000.
a. What is the amount and character of gain on collection of the receivables?
b. What is the amount and character of gain on sale of the inventory?
c. What is the amount and character of gain on sale of the land?
please do not provide iamge based answers thank you
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