Question

At the beginning of year 1 ms. mushroom, an individual, purchased a 20 percent interest in fungi partnership for $22,000. ms. mushroom’s schedule k-1 reported that her share of fungi’s debt at year-end was $29,000, and her share of ordinary loss was $46,600. on january 1, year 2, ms. mushroom sold her interest to another partner for $3,700 cash.

Answer 1

Ms. Mushroom purchased a 20 percent interest in Fungi Partnership for $22,000 and acquired some of the partnership's ownership. Her share of the partnership's debt at year-end was $29,000, and her share of the ordinary loss was $46,600. She later sold her interest for $3,700.

Step-by-step explanation:

Ms. Mushroom's purchase of a 20 percent interest in Fungi Partnership for $22,000 means that she acquired a portion of the ownership in the partnership.

Her share of Fungi's debt at year-end was $29,000, indicating that she is responsible for that portion of the partnership's liabilities.

Additionally, her share of the ordinary loss was reported as $46,600, which represents her portion of the partnership's financial loss.

In the following year, Ms. Mushroom sold her interest to another partner for $3,700 in cash.