When Magdalena's outside basis is $185,000, she receives a liquidating distribution of $46,250 cash and a proportionate share of inventory having a partnership basis of $64,750 and a fair market value of $74,000. The distribution results in a liquidation of both the partnership and her interest. a. How much is Magdalena's basis in the inventory received? $ b. What is the amount of any gain or loss recognized on the liquidation? She has a recognized of $ on the liquidation.
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- Problem 11-33 (LO. 3, 13) Michelle has a basis in her partnership interest of $85,000. In a proportionate liquidating distribution of the partnership, Michelle receives $5,000 cash and a car (a § 1231 asset to the partnership) having a basis of $20,000 to the partnership and a fair market value of $30,000. Disregard any potential depreciation recapture on the car. a. How much gain or loss, if any, may Michelle recognize on the distribution?Michelle recognizes a gain of $ b. What basis will Michelle take in the car? c. Suppose Michelle's 18-year-old son uses the car for his personal use for one year before Michelle sells it for $28,000. (1) Does Michelle recognize any gain or loss? If so how much?5. Assume that a partnership had assets with a book value of P240,000 and a market value of P195,000, outside liabilities of P70,000, loans payable to partner Able of P20,000, and capital balances for partners Able, Baker, and Chapman of P70,000, P30,000, and P50,000. How much would Able receive upon liquidation of the partnership assuming profits and losses are allocated equally? a. P70,000 b. P90,000 C. P75,000 d. P55,000Exercise 11-22 (Algorithmic) (LO. 10) Berdine has a basis of $203,000 in her partnership Interest and recelves land with an adjusted basis to the partnership of $487,200 in termination of her interest. Assume the partnership holds no Mot assets and the entire payment is a 5 736(b) payment with the tax treatment determined under the proportionate liquidating distribution rules. a. What is Berdine's basis in the distributed land? b. If an optional 5 754 adjustment-to-basis election is in effect, by what amount does the partnership adjust the basis of its remaining property? If that adjustment is allocated to depreciable property, to whom does the partnership allocate the resulting depreciation deductions?
- 3. Brielle received $30,000 in cash and an automobile with an adjusted basis and market value of $20,000 in a proportionate liquidating distribution from the BD Partnership. Brielle's basis in the partntership interest was $60,000 before the distribution. What is Brielle's basis in the automobile received in the liquidation? A. $0 B. $10,000 C. $20,000 D. $30,000Write a Sample Format of Statement of Liquidation (Lump Sump) Other Instruction (Assumptions) 1. Values should be written as XXX if positive and (XXX) if negative 2. 7 Partners [Jk, V, RM, Jimin, Hobi, Jin and Suga] 3. There is a gain in the realization of assets 4. There is liquidation expense. 5. V has receivables from partnership. 6. Jin and Suga have payables to the partnershipProblem 2. During liquidation, the Partnership of Pateno, Bautista and Apalisoc became insolvent. On Jan. 17, 2021, after all non-cash assets had been realized and all available cash had been distributed to creditors, the statement of financial position of the partnership is as follows: Liabilities and Partners' Capital: Accounts payable - Trade P60,000 120,000 Pateno, Capital Bautista, Capital -160,000 Apalisoc, Capital -20,000 P-0-1 Total liabilities & partners' capital The partners share profits and losses (including gains and losses in liquidaion) in the ratio 20 %, 50% and 30%, respectively. On Jan. 17, 2021, the personal financial positions of the partners were as shown below: Partner Assets Liabilities Pateno P60,000 P80,000 200,000 Bautista 280,000 Apalisoc 250,000 240,000 Required: Determine the receipt of cash from Bautista and Apalisoc, the appropriate distribution of cash, and the completion of the partnership liquidation.
- 4 Assume the following information just prior to the admission of new partner I: Assets Cash Accounts receivable Partner CH- $ 5,000 43,000 G H 7. New partner I contributes land with a fair value of $100,000. Relative ownership interests after this transaction are: Liabilities Accounts payable G, Capital H, Capital $48,000 Required: Prepare journal entries to record the following unrelated scenarios: 5. New partner I purchases partners G's partnership interest for $40,000. 6. New partner I receives a cash bonus of $2,000 and a one-tenth ownership share, allocated equally from the partnership interests of G and H. Ownership interest 20% 5% 75% 100% Partners' Capital $30,000 10,000 $ 8,000 40,000 $48,000Statement I: In lumpsum liquidation, the remaining cash available after realization and payment of liquidation expenses, will be equal to the total interest of the partners.Statement II: In installment liquidation, the partner who has the highest absorption capacity shall be prioritized in the payment of interest. Group of answer choices Both statements are false Both statements are true S1 is true; S2 is false S1 is false; S2 is trueProblem #1. Partner'Original Investment Froilan Labausa contributed land, inventory, and P280,000 cash to partnership.The land has a book value of P650,000 and a market value P1,350,000.The inventory has a book value of P600,000 and a market value of P510,000.The partnership also assumed a P350,000 a note payable owed by Labausa that was used to purchase the land.Rosalie Balhag to put up cash equivalent to Labausa's net investment. Required: Prepare a journal entry to report Labausa's and Balhag's investment in the partnership.
- k The Pen, Evan, and Torves Partnership has asked you to assist in winding-up its business affairs. You compile the following information: 1. The partnership's trial balance on June 30, 20X1, is Cash Accounts Receivable (net) Inventory Plant and Equipment (net) Accounts Payable Pen, Capital Evan, Capital Torves, Capital Total Profit and loss percentages Preliquidation capital balances Loss absorption potential (capital balances/loss percent) Decrease highest LAP to next highest Debit $ 7,808 34,000 24,808 99,908 Decrease LAPs to next highest: $ 164,908 2. The partners share profits and losses as follows: Pen, 50 percent; Evan, 25 percent; and Torves, 25 percent. 3. The partners are considering an offer of $110,000 for the firm's accounts receivable, inventory, and plant and equipment as of June 30. The $110,000 will be paid to creditors and the partners in installments, the number and amounts of which are to be negotiated. Required: Prepare a cash distribution plan as of June 30, 20X1,…Before liquidation, the following is the financial position of the partnership W, X, Y and Z: W, capital 275,000 W, loan 50,000 X, capital 225,000 Y, capital 257,500 Z, capital 342,500 P&L ratio is 4:3:2:1, respectively. 300,000 was received from certain assets are sold and are distributed to partners. What cash amount should Z receive? a. 300,000 b. 0 c. 135,834 d. 166,166EXERCISE 8-9. Problem Solving 1: Selling price of non-cash assets; cash distribution. As of December 31, 2019, the books of May, Mae, and Mei showed capital balances of P300,000, P250,000, and P100,000, respectively, and cash balance of P25,000. They shared profits and losses equally. On that date, the partners decided to liquidate due to personal reasons. They sold all non-cash assets to Mia at a loss of P90,000. After settling the liabilities to external creditors amounting to P100,000, the partnership had enough cash to distribute to the partners that included a loan from May in the amount of P12,000. REQUIRED: 1. How much were the non-cash assets sold for? 2. How much cash was distributed to each partner?