The VRX Partnership (A Calendar Year-End Entity) Has the Following

question 87

Essay

The VRX Partnership (a calendar year-end entity) has the following assets and no liabilities: $\begin{array}{l}\begin{array}{lrr}&\text { Basis} &\text { FMV} \\\hline\text { Cash } & \$ 27,000 & \$ 27,000 \\\text { Accounts receivable } & -0- & 18,000 \\\text { Inventory } & 103,500 & 121,500 \\\text { Equipment } & \mathbf{2 7 0 , 0 0 0} & \mathbf{3 3 7 , 5 0 0} \\\text { Stock investment } & \underline{67,500} & \underline{\mathbf{6 2 , 5 0 0}} \\\text { Totals } & \underline{\underline{\$ 468,000}} & \underline{\$ 566,500}\end{array}\end{array}$ The equipment was purchased for $360,000 and VRX has taken $90,000 of depreciation. The stock was purchased 7 years ago. What are VRX's hot assets for purposes of a sale of partnership interest?

---

Definitions:

Price Indexes

Price indexes are statistical measures that reflect the average change in prices over time of a basket of goods and services, used to gauge inflation or deflation in an economy.

Nominal GDP

The total value, in current market prices, of all the final goods and services generated within a country's borders over a certain time period.

Real GDP

Real GDP, which adjusts for price changes to offer a true measure of an economy's overall size and its growth trajectory.

Base-Year Prices

Prices of goods and services from a specific base year, used to calculate real values and remove the effect of inflation over time.