Elijah and Rona are both 50-percent partners in the Thakkar Partnership. At the start of the current year, Elijah’s outside basis in Thakkar is $3,000 and Rona’s outside basis in Thakkar is $7,000. During the current year, the distributive share of income for both Elijah and Rona is $500. There are no separately stated items in the current year except for a cash distribution of $5,000 each to Elijah and Rona. Provide an explanation of the computation of Elijah and Rona’s income and ending outside basis for the current year.