Reference no: EM132519695
Question 1: What will be basis each of them will have in the partnership or corporation as well as the basis of the assets and liabilities to the partnership or corporation
Question 2: What will be the basis for corporation for each of them?
Andy will contribute the following:
Cash $10,000
Accounts Receivable $5,000
Inventory of Bicycles at cost $22,000 (sales value = $48,000)
Accounts Payable $2,000.
Floyd will contribute the following:
Cash $15,000
Land at cost $10,000 (market value $15,000)
Building
Cost $ 120,000 (market value $80,000)
Useful life 40 years
Residual Value $20,000
Accumulated depreciation to date $5,000 (2 years @ straight line method)
Mortgage payable $70,000, interest only, payable monthly, balance due in 8 years.