Nadine Fimple Is a One-Third Partner in the NWL Partnership

question 18

Essay

Nadine Fimple is a one-third partner in the NWL Partnership with equal inside and outside bases. On January 1, NWL distributes $100,000 to Nadine in complete liquidation of her FPL interest. NWL's balance sheet as of January 1 is as follows: $\begin{array}{l}\begin{array}{lrr}&\text { Basis}&\text { FMV: }\\\text { Cash} & {\$120,000} & \$ 120,000 \\\text { Inventory} & \mathbf{6 0 , 0 0 0} & \mathbf{180 , 0 0 0} \\\text { Total} & \$\mathbf{18 0 , 0 0 0} & \$300,000 \\\\\text { Nadine, capital} & {\$60,000} &\\\text { Wendell, capital} & \mathbf{60 , 0 0 0} &\\\text { Louis, capital} & \underline{\mathbf{6 0 , 0 0 0}}& \\\text { Total} & \$\mathbf{18 0 , 0 0 0} &\\\end{array}\end{array}$ What is the amount and character of Nadine's recognized gain or loss on the distribution?

Recognize the ethical and legal requirements in advertising, particularly concerning disclosures.

Comprehend the legal and ethical responsibilities of professionals in securing client information.

Identify the opportunities and legal implications of businesses acting on climate change.

Grasp the principles and importance of standing in legal suits, particularly related to environmental law.

---

Definitions:

Operating Activities

The day-to-day actions that a business undertakes to generate revenue, as reflected in the cash flow statement.

Statement of Cash Flows

A financial report that provides aggregate data regarding all cash inflows a company receives from its ongoing operations and external investment sources, as well as all cash outflows that pay for business activities and investments during a given period.

Indirect Method

A way of calculating cash flows for operating activities in the cash flow statement by adjusting net income for changes in non-cash items.

Operating Activities

Operating activities involve the day-to-day functions of a business directly related to its provision of goods and services.