Inventory is not reconciled

Inventory is not reconciled

Hi I’m doing a corporate tax return assignment: a partnership is converted into a corporation. The professor gave me the following information:

On 1-1-2011, partial balance sheet of the partnership has the following:

Tax basis Fair Market Value

Inventory $350,000 $450,000

On 1-1-2011, the partnership converted into a corporation. All assets and liabilities are transferred to the new corporation. During 2011, the following
transactions related to inventory:

Inventory on 12/31/2011 $925,000

Charitable contribution of inventory. At fair market value $250,000

A controlling shareholder took out $20,000 worth of inventory on 9-30-2011. No adjustment was made on the company’s book.

Partial book balance sheet as of 12-31-2011 shows :

Inventory $585,000

There is no other event linked to inventory.

Question: I don’t understand why on 12-31-2011 there are 2 different amounts of inventory: $925k and $585k ? The exercise is correct, so there should be a way to
reconcile the 2 number ?

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