Mario is a 40% partner in the MPC Partnership. On January 1, MPC distributes $32,000 cash and land with a $32,000 fair value (inside basis $16,000). MPC has no liabilities at the date of the distribution. Mario’s basis in MPC is $40,000. What is the amount and character of Mario’s gain or loss from the liquidating distribution?

Speedy auto repairs uses a job-order costing system. the company’s direct materials consist of replacement parts installed in customer vehicles, and its direct labor consists of the mechanics’ hourly wages. speedy’s overhead costs include various items, such as the shop manager’s salary, depreciation of equipment, utilities, insurance, and magazine subscriptions and refreshments for the waiting room. the company applies all of its overhead costs to jobs based on direct labor-hours. at the beginning of the year, it made the following estimates: direct labor-hours required to support estimated output 20,000 fixed overhead cost $ 350,000 variable overhead cost per direct labor-hour $ 1.00 required: 1. compute the predetermined overhead rate. 2. during the year, mr. wilkes brought in his vehicle to replace his brakes, spark plugs, and tires. the following information was available with respect to his job: direct materials $ 590 direct labor cost $ 109 direct labor-hours used 6

Example1 lcnrv: ted company uses the lower of cost or nrv method in valuing its inventory items. the inventory at december 31, 2017, consists of products a, b and c, each having 1,000 units. relevant unit data for these products appear below: item a item b item c cost $ 80 $80 $80 estimated selling price 180 100 90 estimated selling cost 30 30 30 required: using the lower of cost or net realizable value rule, determine the proper value of inventory for balance sheet reporting purposes at december 31, 2017. prepare any necessary journal entry. apply the lower of cost or nrv method: • on an individual inventory basis; • on a group basis; • on a total inventory basis. solution worksheet: inventory (on an individual basis): inventory value item nrv cost lc- item a item b item c total inventory (on a group basis): inventory value item nrv cost lc- group 1 (item a and b) group 2 (item c) total inventory (on an aggregate inventory basis): inventory value item nrv cost lc- total inv

The ledger of laurie rental agency on march 31 of the current year includes the following selected accounts before adjusting entries have been prepared. debit credit prepaid insurance $ 5,400 supplies $ 4,500 equipment 40,000 accumulated depreciation—equipment $12,600 notes payable 25,000 unearned rent revenue 11,100 rent revenue 90,000 interest expense –0– salaries and wages expense 20,000 an analysis of the accounts shows the following. 1. the equipment depreciates $600 per month. 2. two-thirds of the unearned rent revenue was earned during the quarter. 3. the note payable is dated january 1 and bears 12% interest. 4. supplies on hand total $800. 5. the insurance policy is a two-year policy dated january 1. instructions: a. prepare the adjusting entries at march 31, assuming that adjusting entries are made quarterly. additional accounts are: depreciation expense, insurance expense, interest payable, and supplies expense. b. compute the ending balances for prepaid insurance, unearned rent revenue, and rent revenue, and indicate in which financial statement those items will be reported.