! Required information [The following information applies to the questions displayed below.] Elaine pays $40,000 cash for Martha's one-third interest in the Lakewood Partnership. Just prior to the sale, Martha's basis in Lakewood is $140,000. Lakewood reports the following balance sheet: Assets Cash Land Totals Liabilities and capital Capital Totals -Mary -Martha -Margaret Тах Basis FMV $ 50,000 $ 50,000 370,000 70,000 $420,000 $120,000 $140,000 140,000 140,000 $420,000 Assume the land had been purchased several years ago and the partnership does not have a §754 election in place. a-1. What is the amount of Martha's recognized gain or loss on the sale? Amount of recognized Gain or loss 0

! Required information [The following information applies to the questions displayed below.] Elaine pays $40,000 cash for Martha's one-third interest in the Lakewood Partnership. Just prior to the sale, Martha's basis in Lakewood is $140,000. Lakewood reports the following balance sheet: Assets Cash Land Totals Liabilities and capital Capital Totals -Mary -Martha -Margaret Тах Basis FMV $ 50,000 $ 50,000 370,000 70,000 $420,000 $120,000 $140,000 140,000 140,000 $420,000 Assume the land had been purchased several years ago and the partnership does not have a §754 election in place. a-1. What is the amount of Martha's recognized gain or loss on the sale? Amount of recognized Gain or loss 0

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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Required information Problem 10-55 (LO 10-1, LO 10-6) (Algo) [The following information applies to the questions displayed below.] Michelle pays $177,000 cash for Brittany's one-third interest in the Westlake Partnership. Just prior to the sale, Brittany's basis in Westlake is $96,200. Westlake reports the following balance sheet: Tax Basis FMV Assets Cash $ 96, 200 $ 96, 200 Land 192, 400 434, 800 Totals $ 288, 600 $ 531, 000 Liabilities and capital Capital - Amy Capital - Brittany Capital - Ben $ 96, 200 $ 96, 200 $ 96, 200 $ 288, 600 Totals (Leave no answer blank. Enter zero if applicable.) Problem 10-55 Part b (Algo) b. What is Michelle's basis in her partnership interest? What is Michelle's inside basis? Amount Basis in partnership interest Inside basis
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Instructions The capital accounts of Jamie Dexter and Max Gee have balances of $400,000 and $250,000, respectively. Darcey Lind and Loren Rothman are to be admitted to the partnership. Darcey Lind buys one-fifth of Jamie Dexter's interest for $85,000 and one-fourth of Max Gee's interest for $65,000. Loren Rothman contributes $125,000 cash to the partnership, for which she is to receive an ownership equity of $125,000. a. On December 31, journalize the entries to record the admission of (1) Darcey Lind and (2) Loren Rothman. b. What are the capital balances of each partner after the admission of the new partners?
1 John and Mary are equal partnership in a partnership. John's beginning basis is 50,000 and Mary's beginning basis is 70,000 Sales 200,000 Long term capital gain Short term capital loss 6,000 -4,000 Dividend income 2,000 salaries 50,000 Rent Expense 20,000 Interest income 5,000 Depreciation Section 179 expense 30,000 20,000 Distribution to Mary 40,000 Distrbution to John 30,000 1 Calculate ordinary income 2 Calculate Separately Reported Items 3 Calculate ending basis for John and Mary.