Question - Kevin - 40% profit & loss ratio. Kevin contributed a horse training machine valued at $100,000. The training machine was acquired on 1/1/2005 at a cost of $150,000. The machine originally had a ten year life (5 years left @1/1/2010) and is depreciated on the straight-line method using a 10 year life at the rate of $15,000 of depreciation per year. Accumulated depreciation of $75,000 had been properly claimed from 1/1/2004 through 12/31/2009, so the machine had a net tax basis of $75,000 ($150,000 cost less $75,000 accumulated depreciation through 12/31/2009) as of the date it was contributed to the partnership.
You need to make a journal entry to record Kevin's capital contribution of the training machine as of 1/1/2010.