Y and Z have capital balances of $80, 000, $180,000 and $60,000 respectively. Immediately prior to liquidation.  Total remaining assets have a book value of $320,000 and assume liabilities have been paid. There is one remaining asset with a fair market value of $70,000. All three partners agree to share profit and loss equally. Z wishes to take the asset with him and start a new business and would accept $70,000 in cash; the remaining partners a

SWFT Individual Income Taxes
43rd Edition
ISBN:9780357391365
Author:YOUNG
Publisher:YOUNG
Chapter20: Corporations And Parterships
Section: Chapter Questions
Problem 55P
icon
Related questions
Question

1.

Partners X, Y and Z have capital balances of $80, 000, $180,000 and $60,000 respectively. Immediately prior to liquidation.  Total remaining assets have a book value of $320,000 and assume liabilities have been paid. There is one remaining asset with a fair market value of $70,000. All three partners agree to share profit and loss equally. Z wishes to take the asset with him and start a new business and would accept $70,000 in cash; the remaining partners agree this would be fair. How much cash in addition to the asset would first be distributed to Z before any of the other partners receive anything?

a.

​$30,000

b.

​$100,000

c.

​$240,000

d.

​$50,000

Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps

Blurred answer
Knowledge Booster
Partners and Partnerships
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.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
SWFT Individual Income Taxes
SWFT Individual Income Taxes
Accounting
ISBN:
9780357391365
Author:
YOUNG
Publisher:
Cengage
Individual Income Taxes
Individual Income Taxes
Accounting
ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT
SWFT Essntl Tax Individ/Bus Entities 2020
SWFT Essntl Tax Individ/Bus Entities 2020
Accounting
ISBN:
9780357391266
Author:
Nellen
Publisher:
Cengage