55 **Partnership Balance Sheet Analysis***Overview:*Mary and Scott formed a partnership that maintains its records on a calendar-year basis. The balance sheet of the MS Partnership at year-end is presented below:**Balance Sheet:**- **Assets:** - **Cash:** - Basis: $24 - Fair Market Value (FMV): $24 - **Land:** - Basis: $108 - FMV: $180 - **Inventory:** - Basis: $60 - FMV: $36- **Totals:** - Basis: $192 - FMV: $240- **Capital Accounts:** - **Mary:** - Basis: $96 - FMV: $120 - **Scott:** - Basis: $96 - FMV: $120 - **Totals:** - Basis: $192 - FMV: $240*Additional Information:*At the end of the current year, Kari will receive a one-third capital interest only in exchange for services rendered. Kari's interest will not be subject to a substantial risk of forfeiture, and the costs for the type of services she provided are typically not capitalized by the partnership. For the current year, the income and expenses from operations are equal. Consequently, the only tax consequences for the year are those relating to the admission of Kari to the partnership.*Instructions:*Note: Leave no answer blank. Enter zero if applicable. Do not round intermediate calculations.**Task C:**Prepare a balance sheet of the partnership immediately after Kari's admission showing the partners' tax capital accounts and capital accounts stated at fair market value.- **MS Partnership Balance Sheet** - **Assets:** - Cash - Land - Inventory - **Totals:** - **Capital Accounts:** - Capital-Mary - Capital-Scott - Capital-KariNote: The table is initially filled with placeholder fields that need values based on future operations and admissions.

It is an agreement between two or more parties to conduct the business and share the profits and losses. The profit or loss between the partners will be shared on the agreed profit or loss sharing ratio. If noting was mentioned about the sharing of profits or losses in the agreement, then the partners will share the profits and loss equally. Partners will receive interest from the business on the capital invested by them into the business in addition to the remuneration received by them.The following are the excel formulas for above calculations:

Business

Accounting

Mary and Scott formed a partnership that maintains its records on a calendar-year basis. The balance sheet of the MS Partnership at year-end is as follows: Cash Land Inventory Mary Scott Basis $24 108 60 $192 $96 96 $ 192 Fair Market Value $24 180 36 $ 240 $ 120 120 $ 240

Mary and Scott formed a partnership that maintains its records on a calendar-year basis. The balance sheet of the MS Partnership at year-end is as follows: Cash Land Inventory Mary Scott Basis $24 108 60 $192 $96 96 $ 192 Fair Market Value $24 180 36 $ 240 $ 120 120 $ 240

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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