I need help on Accounting receivables problem

timer Asked: May 3rd, 2016

Question description

Ben Grimm is a 40% partner in We Four, LLC a super-heroing organization. (He does most of the heavy lifting. Reed has 40%, he is the brains. Sue has 10%--they never see her doing anything. Her brother Johnny has the other 10%--he gets too hot under the collar to deal with the customers.) On 1January 2013, his outside basis in his LLC interest was $125,000. This included his share of liabilities--$75,000. (Reed is always repairing and inventing gadgets saving the world is expensive.) In addition to the operating costs, the insurance premiums alone were six figures---you try paying for the cost of cleaning up after a visit from Dr. Doom they still made a profit. The Company's a net profit of $300,000 before any payments to partners. Reed gets a guaranteed payment of $75,000 (a bit of a stretch, but he does invent the impossible) and Ben gets a guaranteed payment of $20,000 as a return on his investment (he used an inheritance form his Aunt Petunia to buy their headquarters). He gets another $30,000 for his services hitting things this is a labor intensive business. Johnny and Sue each get $10,000.

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