Megan and matthew are equal partners in the j & j partnership (calendar-year-end entity). on january 1 of the current year, they decide to liquidate the partnership. megan’s basis in her partnership interest is $100,000 and matthew’s is $35,000. the two partners receive identical distributions with each receiving the following assets:
tax basis fmv
cash .$ 30,000 $ 30,000
inventory 5,000 6,000
land 500 1,000
totals .$ 35,500 .$37,000
a. what is the amount and character of megan’s recognized gain or loss?
b. what is megan’s basis in the distributed assets?
c. what is the amount and character of matthew’s recognized gain or loss?
d. what is matthew’s basis in the distributed assets?

During 2017, sheridan company expected job no. 26 to cost $300000 of overhead, $500000 of materials, and $200000 in labor. sheridan applied overhead based on direct labor cost. actual production required an overhead cost of $260000, $510000 in materials used, and $150000 in labor. all of the goods were completed. what amount was transferred to finished goods?

Steele bicycle manufacturing company currently produces the handlebars used in manufacturing its bicycles, which are high-quality racing bikes with limited sales. steele produces and sells only 10,000 bikes each year. due to the low volume of activity, steele is unable to obtain the economies of scale that larger producers achieve. for example, steele could buy the handlebars for $31 each: they cost $34 each to make. the following is a detailed breakdown of current production costs: after seeing these figures, steele's president remarked that it would be foolish for the company to continue to produce the handlebars at $34 each when it can buy them for $31 each. calculate the total relevant cost. do you agree with the president's conclusion?

Kelso electric is debating between a leveraged and an unleveraged capital structure. the all equity capital structure would consist of 40,000 shares of stock. the debt and equity option would consist of 25,000 shares of stock plus $280,000 of debt with an interest rate of 7 percent. what is the break-even level of earnings before interest and taxes between these two options?