Fair Value of Items Contributed to Partnership

Fair Value of Items Contributed to Partnership (FMV=Basis) on March 1, 2014Assets, Liabilities & EquitiesCashARInventoryLandFurnitureLess: Accumulated DepreciationComputerLess: Accumulated DepreciationBuildingTotal AssetsAPLoan-LS$10,000$15,000P$25,000a)L$25,000I$25,000$15,000$15,000T$25,000$10,000$15,000$50,000$90,000$0$0Use the information to the left to journalize the formation of the partnership. Prepare the beginning partnershipbalance sheet using the template to the rightAccountDRCR$50,000$0$0$60,000$30,000$5,000$85,000$0$0$55,000$0$5,000$45,000$15,000$0b) Assume it is now December 31, 2014. Adjust for depreciation for the furniture (7 year life), computer (3 year life)and building (40 year life).Accountc)DRCRIn addition to the depreciation expenses there are $10,000 of operations expenses all paid in cash. There was alsooperational revenue of $20,000 (also paid in cash). Prepare the partnership balance sheet as of December 31,2014 also given the effects of transactions in a) and b).Income Statement for SPLIT for the Year Ended December 31, 2014Operational RevenueDepreciation Expense***Other Operational ExpensesNet Income*** Use amount from adjusting entry and calculate net income$20,000$10,000Balance Sheet for SPLIT as of March 1, 2014AssetsCashARInventoryLandFurnitureLess: Accumulated DepreciationComputerLess: Accumulated DepreciationBuildingTotal AssetsLiabilitiesAPLoan-LEquityCapital-SCapital-PCapital-LCapital-ICapital-TTotal Equity and LiabilitiesBalance Sheet for SPLIT as of December 31, 2014AssetsCashARInventoryLandFurnitureLess: Accumulated DepreciationComputerLess: Accumulated DepreciationBuildingLess: Accumulated DepreciationTotal AssetsLiabilitiesAPLoan-LEquityCapital-SCapital-PCapital-LCapital-ICapital-TTotal Equity and LiabilitiesStatement of Liquidation for SPLITAssetsCashNoncash A Accounts PayablePartners CapitalLiabilitiesNotes PayableLoanSPLRealization and allocationSubtotalsDistributionsOutside CreditorsPartner LoansPartners CapitalPost Liquidation Balances** Fixed assets each sold for 20% above ending book value, Inventory sold for 10% below ending book value and all other fair values were equal to book value.IT