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Brrunno [24]
2 years ago
15

Prairee partnership has four equal partners, Dodd, Crank, Pick, and Mack. Each of the partners had a tax basis of $320,000 as of

January 1, 20X5. Prairee's 20X5 net business income was $152,000. During 20X5, Prairee paid Mack guaranteed payments of $4,000 for deductible services rendered. During 20X5, each of the four partners took a distribution of $50,000. What is Mack's tax basis in Prairee on December 31, 20X5?
a. $307,000

b. $358,000

c. $422,000

d. $472,000
Business
1 answer:
NemiM [27]2 years ago
7 0

Answer:

mack tax basis in prairee on 31 december = 307000

correct option is a. $307,000

Explanation:

given data

tax basis = $320,000

net business income = $152,000

services rendered = $4,000

distribution = $50,000

solution

we know allocated income is here

allocated income = net business income - guaranteed payment

allocated income = 152000 - 4000

allocated income = 148000

so

mack share of net income is 25 % of allocated income

mack share of net income = 37000

so

mack tax basis in prairee on 31 december = 320000 + 37000 - 50000

mack tax basis in prairee on 31 december = 307000

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Answer:

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Answer:

Windswept, Inc.

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= $556.

Explanation:

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Income Statement for the year ended December 31, 2017:

Net Sales                                           $9,740

Cost of goods sold                              7,910

Depreciation                                          480

Earnings before interest and taxes $1,350

Interest paid                                            110

Taxable income                                $1,240

Taxes                                                     434

Net income                                         $806

Windswept, Inc.

2016 and 2017  Balance Sheets ($ in millions)

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Cash                      $260       $290  Accounts payable    $1,490   $1,460

Accounts rec.        1,060         960  Long-term debt           1,130     1,330

Inventory               1,900       1,740  Common stock          3,400    3,340

Total                   $3,220   $2,990  Retained earnings        670       920

Net fixed assets   3,470     4,060

Total assets      $6,690    $7,050  Total liab. & equity  $6,690  $7,050

The total dividends paid for 2017:

Retained earnings, Dec. 31, 2016        $670

Net income for the year, 2017               806

Less Retained earnings, Dec. 31, 2017 920

Dividends paid                                     $556

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