Required information [The following information applies to the questions displayed below.] Pam, Sergei, and Mercedes are all one-third partners in the capital and profits of Oak Grove General Partnership. Partnership liabilities are allocated among the partners in accordance with their capital and profits interests. In addition to their normal share of the partnership's annual income, Pam and Sergei receive annual guaranteed payments of $20,000 each to compensate them for additional services they provide. Oak Grove's income statement for the current year reflects the following revenues and expenses: Sales revenue Dividend income §1231 losses Cost of goods sold Employee wages Depreciation expense Guaranteed payments Miscellaneous expenses Overall net income In addition, Oak Grove owed creditors $90,000 at the beginning of the year and $150,000 at the end, and Pam, Sergei, and Mercedes had a tax basis of $50,000 in their interests at the beginning of the year. Also, on December 31 of the current year, Sergei and Mercedes agreed to increase Pam's capital and profits interests from 1/3 to 40 percent in exchange for additional services she provided to the partnership. The current liquidation value of the additional capital interest Pam received is $40,000. Note: Round your intermediate calculations and final answers to the nearest whole dollar amount. . If, in addition to the expenses listed above, the partnership donated $12,000 to a political campaign, what tax basis do the partners have in their partnership interests at the end of the year assuming the liquidation value of the additional capital interest Pam received It the end of the year remains at $40,000? Tax basis $ 476,700 6,600 (3,800) (245,000) (92,000) (31,000) (40,000) (11,500) $ 60,000 Pam Sergei Mercedes
Required information [The following information applies to the questions displayed below.] Pam, Sergei, and Mercedes are all one-third partners in the capital and profits of Oak Grove General Partnership. Partnership liabilities are allocated among the partners in accordance with their capital and profits interests. In addition to their normal share of the partnership's annual income, Pam and Sergei receive annual guaranteed payments of $20,000 each to compensate them for additional services they provide. Oak Grove's income statement for the current year reflects the following revenues and expenses: Sales revenue Dividend income §1231 losses Cost of goods sold Employee wages Depreciation expense Guaranteed payments Miscellaneous expenses Overall net income In addition, Oak Grove owed creditors $90,000 at the beginning of the year and $150,000 at the end, and Pam, Sergei, and Mercedes had a tax basis of $50,000 in their interests at the beginning of the year. Also, on December 31 of the current year, Sergei and Mercedes agreed to increase Pam's capital and profits interests from 1/3 to 40 percent in exchange for additional services she provided to the partnership. The current liquidation value of the additional capital interest Pam received is $40,000. Note: Round your intermediate calculations and final answers to the nearest whole dollar amount. . If, in addition to the expenses listed above, the partnership donated $12,000 to a political campaign, what tax basis do the partners have in their partnership interests at the end of the year assuming the liquidation value of the additional capital interest Pam received It the end of the year remains at $40,000? Tax basis $ 476,700 6,600 (3,800) (245,000) (92,000) (31,000) (40,000) (11,500) $ 60,000 Pam Sergei Mercedes
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
100%
![Required information
[The following information applies to the questions displayed below.]
Pam, Sergei, and Mercedes are all one-third partners in the capital and profits of Oak Grove General Partnership.
Partnership liabilities are allocated among the partners in accordance with their capital and profits interests. In addition to
their normal share of the partnership's annual income, Pam and Sergei receive annual guaranteed payments of $20,000
each to compensate them for additional services they provide. Oak Grove's income statement for the current year reflects
the following revenues and expenses:
Sales revenue
Dividend income
§1231 losses
Cost of goods sold
Employee wages
Depreciation expense
Guaranteed payments
Miscellaneous expenses
Overall net income
In addition, Oak Grove owed creditors $90,000 at the beginning of the year and $150,000 at the end, and Pam, Sergei,
and Mercedes had a tax basis of $50,000 in their interests at the beginning of the year. Also, on December 31 of the
current year, Sergei and Mercedes agreed to increase Pam's capital and profits interests from 1/3 to 40 percent in
exchange for additional services she provided to the partnership. The current liquidation value of the additional capital
interest Pam received is $40,000.
Note: Round your intermediate calculations and final answers to the nearest whole dollar amount.
b. If, in addition to the expenses listed above, the partnership donated $12,000 to a political campaign, what tax basis do the partners
have in their partnership interests at the end of the year assuming the liquidation value of the additional capital interest Pam received
at the end of the year remains at $40,000?
Tax basis
$ 476,700
6,600
(3,800)
(245,000)
(92,000)
(31,000)
(40,000)
(11,500)
$60,000
Pam
Sergei
Mercedes](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F9976f245-0987-4f53-92e6-265364542515%2F26517ded-45ab-42ab-b8aa-a48583e1fcd7%2Fjqx2xam_processed.png&w=3840&q=75)
Transcribed Image Text:Required information
[The following information applies to the questions displayed below.]
Pam, Sergei, and Mercedes are all one-third partners in the capital and profits of Oak Grove General Partnership.
Partnership liabilities are allocated among the partners in accordance with their capital and profits interests. In addition to
their normal share of the partnership's annual income, Pam and Sergei receive annual guaranteed payments of $20,000
each to compensate them for additional services they provide. Oak Grove's income statement for the current year reflects
the following revenues and expenses:
Sales revenue
Dividend income
§1231 losses
Cost of goods sold
Employee wages
Depreciation expense
Guaranteed payments
Miscellaneous expenses
Overall net income
In addition, Oak Grove owed creditors $90,000 at the beginning of the year and $150,000 at the end, and Pam, Sergei,
and Mercedes had a tax basis of $50,000 in their interests at the beginning of the year. Also, on December 31 of the
current year, Sergei and Mercedes agreed to increase Pam's capital and profits interests from 1/3 to 40 percent in
exchange for additional services she provided to the partnership. The current liquidation value of the additional capital
interest Pam received is $40,000.
Note: Round your intermediate calculations and final answers to the nearest whole dollar amount.
b. If, in addition to the expenses listed above, the partnership donated $12,000 to a political campaign, what tax basis do the partners
have in their partnership interests at the end of the year assuming the liquidation value of the additional capital interest Pam received
at the end of the year remains at $40,000?
Tax basis
$ 476,700
6,600
(3,800)
(245,000)
(92,000)
(31,000)
(40,000)
(11,500)
$60,000
Pam
Sergei
Mercedes
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 2 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education