FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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On January 1 of this year, Cynthia and Marin formed a General Partnership with the following contributions:

Cynthia Basis FMV

Cash $ 450,000 $ 450,000

Marin

Equipment $ 30,000 $ 50,000

Land 200,000 500,000

Liability (Recourse) (100,000) (100,000)

 

The profit sharing ratios are Cynthia 70% and Marin 30% while the loss sharing ratios are Marin 60% and Cynthia 40%. Capital is owned 50% each. The land was contributed subject to a recourse liability.

a. What is Cynthia’s basis in the partnership on the date of the contributions?

b. What is Marin’s basis in the partnership on the date of the contributions?

c. What is the partnership’s basis in the Cash, Equipment, and Land? 

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