A general partnership had the following information at the end of each of the ye

Question

A general partnership had the following information at the end of each of the years 20x0. 20x1. 20x 2 Current liabilities. $20000. $20000. $18000 Long term liabilities. $50000. $50000. $60000 Net income (or loss). N/A. ($40000). $15000
All liabilities are recourse debt and partner M gaurenteed all the long term liabilities. M a 10% owner had a $3000 basis in the partnership at the end of 20x0. M made no contribution or withdrawal during 20x1 or 20x2. How much is M basis at the end of 20x2? A $10000 B$10500 C $60300 D $60500 A general partnership had the following information at the end of each of the years 20x0. 20x1. 20x 2 Current liabilities. $20000. $20000. $18000 Long term liabilities. $50000. $50000. $60000 Net income (or loss). N/A. ($40000). $15000
All liabilities are recourse debt and partner M gaurenteed all the long term liabilities. M a 10% owner had a $3000 basis in the partnership at the end of 20x0. M made no contribution or withdrawal during 20x1 or 20x2. How much is M basis at the end of 20x2? A $10000 B$10500 C $60300 D $60500 20x0. 20x1. 20x 2 Current liabilities. $20000. $20000. $18000 Long term liabilities. $50000. $50000. $60000 Net income (or loss). N/A. ($40000). $15000
All liabilities are recourse debt and partner M gaurenteed all the long term liabilities. M a 10% owner had a $3000 basis in the partnership at the end of 20x0. M made no contribution or withdrawal during 20x1 or 20x2. How much is M basis at the end of 20x2? A $10000 B$10500 C $60300 D $60500

Explanation / Answer

At the starting of year M has a bais of $3000

In year 20x1 = 10% of -40000 = -$4000

In year 20x2 = 10% of 15000 = $1500

And long term liabilities will be also for M = $60000

While adding all the values we will get $60500

So correct option is option D.

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