Jonathon Owns a One-Third Interest in a Liquidating Partnership

question 217

Multiple Choice

Jonathon owns a one-third interest in a liquidating partnership. Immediately before the liquidation, Jonathon's basis in the partnership interest is $60,000. The partnership distributes cash of $32,000 and two parcels of land (each with a fair market value of $10,000) . Parcel A has a basis of $2,000 to the partnership and Parcel B has a basis of $6,000. Jonathon's basis in the two parcels of land is:

• A) Parcel A, $2,000? Parcel B, $6,000.
• B) Parcel A, $7,000? Parcel B, $21,000.
• C) Parcel A, $10,000? Parcel B, $10,000.
• D) Parcel A, $14,000? Parcel B, $14,000.
• E) Parcel A, $15,000? Parcel B, $45,000.

Grasp the concept and implications of e-commerce in accounting.

Understand how computerized accounting systems enhance record-keeping and reporting.

Identify the structure and use of a purchases journal.

Recognize the functionality and benefits of computerized accounting systems over manual systems.

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Definitions:

Inputs

Inputs are the resources such as labor, materials, and capital that are used in the production process to create goods and services.

Industry Entry

The process by which a new competitor or business enters into an industry, facing various barriers such as high startup costs, regulatory requirements, and competition.

Short Run

A period of time during which at least one of a firm's inputs is fixed and cannot be changed.

Normal Return

The minimum profit necessary to keep a company in business, equating to the opportunity cost of capital.