See the attached image. I need help with b) **The Whitewater LLP: Partner Financial Details**The Whitewater LLP is equally owned by three partners and presents the following balance sheet at the end of the current tax year.**Balance Sheet Overview**| Asset | Basis | FMV ||--------------------------|--------|--------|| Cash | $60,000| $60,000|| Unrealized receivables | $– | $15,000|| Land | $15,000| $45,000|| **Total** | $75,000| $120,000|**Capital Accounts**| Partner | Basis | FMV ||---------------------------|--------|--------|| Petula, capital | $25,000| $40,000|| Prudence, capital | $25,000| $40,000|| Primrose, capital | $25,000| $40,000|| **Total** | $75,000| $120,000|**Scenario**Partner Petula, an active (i.e., “general”) partner, is retiring from this service-oriented partnership and receives $60,000 in cash. This amount does not include any stated goodwill.**Questions**a. How much of the payment is for “unstated goodwill”?b. How is the $60,000 allocated between a § 736(a) income payment and a § 736(b) property payment?

Given information is: Retiring partner receives $60,000 Cash none of which is stated for Goodwill.Income payment under 736 (a) = 60,000 * 1/3 = $20,000 Property payment = Excess payment other than income payment = (60,000 - 20,000) = $40,000

Business

Accounting

The Whitewater LLP is equally owned by three partners ar shows the following balance sheet at the end of the curren year. Basis FMV Cash S60,000 $6,000 Unrealized receivables Land -0- 15,000 15,000 $75,000 $25,000 45,000 $120,000 $ 40,000 40,000 40,000 $120,000 Petula, capital Prudence, capital Primrose, capital 25,000 25,000 $75,000

The Whitewater LLP is equally owned by three partners ar shows the following balance sheet at the end of the curren year. Basis FMV Cash S60,000 $6,000 Unrealized receivables Land -0- 15,000 15,000 $75,000 $25,000 45,000 $120,000 $ 40,000 40,000 40,000 $120,000 Petula, capital Prudence, capital Primrose, capital 25,000 25,000 $75,000

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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