Emily, Becky, and Kellye form Whoop! Shotz with the following contributions:

Emily............................$25,000
Becky...........................$25,000
Kellye.................Legal services

After the formation, each has a one-third stake in the company. What amount of gain or income will they each record if the company is valued at $100,000?

Transcribed Image Text:

Emily Becky $ -0- 8,333 Kellye $ -0- 8,333 a. $25,000 33,333 33,333 25,000 b. C. d. -0- 25,000 -0- 25,000