Q. No. 4- In March of Year 1, Sally Rogers and Peter Dean began a business partnership. Each contributes cash of $75,000 and agrees to share income and losses equally. The following information is provided for the first fiscal year of the partnership. a) The partnership net income of $328,000 consisted of the following sources of income: Business income $300,000 Eligible dividends 20,000 Taxable capital gains 10,000 Allowable capital losses _(2,000) $328,000 b) In addition, the partnership received a tax-free capital dividend of $12,000 and donated $3,000 to registered charities. c) Each partner takes draws totaling $60,000. Determine the adjusted cost base for the partnership interest of each of the partners at January 1, Year 2.
Q. No. 4- In March of Year 1, Sally Rogers and Peter Dean began a business partnership. Each contributes cash of $75,000 and agrees to share income and losses equally. The following information is provided for the first fiscal year of the partnership. a) The partnership net income of $328,000 consisted of the following sources of income: Business income $300,000 Eligible dividends 20,000 Taxable capital gains 10,000 Allowable capital losses _(2,000) $328,000 b) In addition, the partnership received a tax-free capital dividend of $12,000 and donated $3,000 to registered charities. c) Each partner takes draws totaling $60,000. Determine the adjusted cost base for the partnership interest of each of the partners at January 1, Year 2.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Q. No. 4- In March of Year 1, Sally Rogers and Peter Dean began
a business partnership. Each contributes cash of $75,000 and
agrees to share income and losses equally. The following
information is provided for the first fiscal year of the partnership.
a) The partnership net income of $328,000 consisted of the
following sources of income:
Business income
$300,000
Eligible dividends
20,000
Taxable capital gains
10,000
Allowable capital losses (2,000)
$328,000
b) In addition, the partnership received a tax-free capital
dividend of $12,000 and donated $3,000 to registered
charities.
c) Each partner takes draws totaling $60,000.
Determine the adjusted cost base for the partnership interest of
each of the partners at January 1, Year 2.
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