Nadine Fimple Is a One-Half Partner in the NL Partnership

question 56

Essay

Nadine Fimple is a one-half partner in the NL Partnership with equal inside and outside bases. On January 1, NL distributes accounts receivable with a fair value of $100,000 to Nadine as an operating distribution. NL's balance sheet as of January 1 is as follows:
$$\begin{array} { | l | r | r | } \hline & \text { Basis } & \text { FMV } \\\hline \text { Cash } & \$ 100,000 & \$ 100,000 \\\hline \text { Account receivable } & - 0 & 100,000 \\\hline \text { Total } & \$ 100,000 & \$ 200,000 \\\hline\end{array}$$ What is the amount and character of Nadine's recognized gain or loss on the distribution?

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Definitions:

Concurrent Engineering

A systematic approach to integrated product development that emphasizes the parallelisation of tasks and early consideration of every aspect of the product life cycle.

Product Design

The process of creating and developing new products, focusing on specifications, functionality, aesthetics, and usability.

Speedier Development

The practice of accelerating the creation and implementation process of projects or products to reduce time to market.

House of Quality

A matrix used in quality function deployment that visually relates customer desires to the means of achieving those desires, highlighting the relationships between customer requirements and product capabilities.