At the beginning of the tax year, Melodie's basis in the MIP LLC was $60,000, including Melodie's $40,000 share of the LLC's liabilities. At the end of the year, MIP distributed to Melodie cash of $10,000 and inventory (bais of $6,000, fair market value of $10,000). MIP repaid all of its liabilities by the end of the year.

a. If this is a proportionate nonliquiding distribution, what is the tax effect of the distribution to Melodie and MIP? After the distribution, what is Melodie's basis in the inventory and in her MIP interest?

b. Would your answers to (a) change if this had been a proportionate liquidating distribution? Explain.

Galwaysc electronics makes two products. model a requires component a and component c. model b requires component b and component c. new versions of both models are released each year with updated versions of all components. all components are sourced overseas, and abc contracts annually for a quantity of each component before seeing that year’s demand. components are only assembled into finished products once demand for each model is known. for the coming year, alwaysc’s purchasing manner has proposed ordering 500,000 units of component a, 630,000 of component b, and 1,000,000 units of component c. her boss has asked why she has recommended purchasing so much of components a and b when alwaysc will not have enough of component c to fully use all of the inventory of a and b. what factors might the purchasing manager cite to explain her recommended order? explain your reasoning.

20. to add body to a hearty broth, you may use a. onions. b. pasta. c. cheese. d. water.

On january 1, year 1, purl corp. purchased as a long-term investment $500,000 face amount of shaw, inc.’s 8% bonds for $456,200. the bonds were purchased to yield 10% interest. the bonds mature on january 1, year 6, and pay interest annually on january 1. purl uses the effective interest method of amortization. what amount (rounded to nearest $100) should purl report on its december 31, year 2, balance sheet for these held-to-maturity bonds?