Individuals M, N, and O form MNO Partnership. M contributes $180,000 in cash in return for a 1/3 interest in the partnerships capital and a 1/3 interest in the partnerships profits. N contributes $180,000 in cash in return for a 1/3 interest in the partnerships capital and a 1/3 interest in the partnerships profits. O contributes services in return for a 1/3 interest in the partnerships capital and a 1/3 interest in the partnerships profits. MNO does not capitalize the services provided by O.

- How much ordinary income does O recognize upon the formation of the partnership?

- Please construct a balance sheet for MNO reflecting the formation of the LLC.