On January 1, 20X9, Mr The $3,000 of Interest Was Paid on a $60,000 Loan

question 5

Essay

On January 1, 20X9, Mr. Blue and Mr. Grey each contributed $100,000 to form the B&G general partnership. Their partnership agreement states that they will each receive a 50% profits and loss interest. The partnership agreement also provides that Mr. Blue will receive an annual $36,000 guaranteed payment. B&G began business on January 1, 20X9. For its first taxable year, its accounting records contained the following information. $\begin{array}{|l|r|r|r|r|r|r|r|}\hline&& \text { Jane } & 25 \% & \text { Joe } & 45 \% & \text { Jack } & 30 \% \\\hline\text { Initial Basis}&&& 5,000&& 10,000 && 2,000 \\\hline \text { Ordinary Inc. } & 100,000 & & 25,000 & & 45,000 & & 30,000 \\\hline 1231 \text { gain } & 15,000 & & 3,750 & & 6,750 & & 4,500 \\\hline \text { Tax-exempt income } & 3,000 & & 750 & & 1,350 & & 900 \\\hline \text { Additional Debt } & 12,000 & & 3,000 & & 5,400 & & 3,600 \\\hline \text { Charitable contribution } & (25,000) & & (6,250) & & (11,250) & & (7,500) \\\hline \text { Total } & 105,000 & & 31,250 & & 57,250 & & 33,500 \\\hline\end{array}$ The $3,000 of interest was paid on a $60,000 loan made to B&G by Key Bank on June 30, 20X9. B&G repaid $10,000 of the loan on December 15, 20X9. Neither of the partners received a cash distribution from B&G in 20X9.
Complete the following table related to Mr. Blue's interest in B&G partnership: $$\begin{array}{l}\text { PARTNERS' OUTSIDE BASIS }\\\begin{array} { | l | r | l | r | l | r | } \hline { \text { Troy } } && { \text { Peter } } & &{ \text { Sarah } } \\\hline \text { Cash } & 3,000 & \text { Cash } & 5,000 & \text { Cash } & 2,000 \\\hline \text { Inventory } & 5,000 & \text { Land } & 20,000 & \text { Equipment } & 3,500 \\\hline \text { Building } & 10,000 & \text { Relief of Debt } & ( 12,000 ) & \text { AR } & 1,000 \\\hline \text { Relief of Debt } & ( 10,000 ) & \text { Debt } & 8,500 & \text { Reliet of Debt } & ( 23,000 ) \\\hline \text { Debt } & 8,500 & & & \text { Debt } & 28,000 \\\hline \text { Preliminary Basis } & 16,500 & \text { Preliminary Basis } & 21,500 & \text { Preliminary Basis } & 11,500 \\\hline \text { Gain(Loss) } & - & \text { Gain(Loss) } & & \text { Gain(Loss) } &- \\\hline \text { Outside Basis } & 16,500 & \text { Outside Basis } & 21,500 & \text { Outside Basis } & 11,500 \\\hline\end{array}\end{array}$$

Acknowledge the significance of insurance company ratings in purchase decisions.

Understand the concept and strategic importance of customer relationship management (CRM) in retaining customers and adding value.

Comprehend the principles and applications of value chain analysis in optimizing operational efficiency.

Grasp the fundamentals and significance of total quality management (TQM) and its impact on customer satisfaction and competitive advantage.

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Definitions:

Batch Size

The quantity of items or units produced in a single manufacturing run or production cycle, which can significantly impact production efficiency and cost.

Complexity

The state or quality of being intricate or complicated, often used to describe systems, processes, or problems.

Overhead Resources

The ongoing operational costs of running a business that are not directly tied to producing goods or services.

Plantwide Overhead Rate

A single overhead absorption rate calculated for an entire manufacturing plant and applied to all units produced, simplifying the allocation of indirect costs.