- 156 -
Opening balance $85,423
Contribution to partnership 150,000
1983 loss (287,165)
Account total (51,742)
On December 31, 1984, IRA transferred its 50-percent
interest in the Sherwood partnership, 45 percent each to Carlco
and TMT and 10 percent to BWK, Inc. As a result, Carlco and TMT
each received a 22.5-percent interest in the Sherwood partnership
and BWK, Inc., received a 5-percent interest. IRA reported a
gain of $51,742 (the excess of the $376,742 of total losses
claimed over IRA's total investment of $325,000) on the transfer
of its interest in Sherwood and recorded the transfer on its
books as follows:
Investment in Sherwood
Opening balance ($51,742)
Gain on distribution of Sherwood 51,742
Account total 0
Investment in Carlco
Rec. gain on dist of Sherw 1
Investment in TMT
Rec. gain on dist of Sherw 1
Investment in BWK, Inc.
Rec. gain on dist of Sherw 1
Adjusting Journal Entry 21
Invest in Sherwood 51,742
Invest in Carlco 1
Invest in BWK 1
Invest in TMT 1
Gain on sale of Pship 51,745
Carlco, TMT, and BWK, Inc., recorded the contribution of the
Sherwood partnership as follows:
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