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Brrunno [24]
3 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]3 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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A point outside the production possibilities curve represents a combination of goods that is
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3 years ago
Andrew and Brianna are married and live in Texas, a community-property state. For their birthdays this year Andrew gave cash gif
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5 0
3 years ago
In its most recent annual report, Appalachian Beverages reported current assets of $39,900 and a current ratio of 1.90. Assume t
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Answer:

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The Updated current ratio is:

= 1.65

Explanation:

a) Data and Calculations:

Current assets = $39,900

Current ratio = 1.90

Current liabilities = $21,000 ($39,900/1.90)

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Cash                           ($2,000)

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Ending balance =      $26,100

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1. Inventory $5,100 Accounts Payable $5,100

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