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Comprehensive Problem $16-63($LO $16-1,$ LO $16-2,$ LO $16-3,$ LO $16-4,$ LO $16-5,$ LO $16-6)($Algo$)$

$[$The following information applies to the questions displayed below.$]$

Carrie D'Lake, Reed A$.$ Green, and Doug A$.$ Divot share a passion for golf and decide to go into the golf club manufacturing business together. On January $2,2023,$ D'Lake, Green, and Divot form the Slicenhook Partnership, a general partnership. Slicenhook's main product will be a perimeter$-$weighted titanium driver with a patented graphite shaft. All three partners plan to actively participate in the business. The partners contribute the following property to form Slicenhook:

Carrie had recently acquired the land with the idea that she would contribute it to the newly formed partnership. The partners agree to share in profits and losses equally. Slicenhook elects a calendar year$-$end and the accrual method of accounting.

In addition, Slicenhook received a $\backslash (\backslash$$ $1,776,000\backslash )$ recourse loan from Big Bank at the time the contributions were made. Slicenhook uses the proceeds from the loan and the cash contributions to build a state$-$of$-$the$-$art manufacturing facility $(\backslash (\backslash$$ $1,315,000\backslash )),$ purchase equipment $(\backslash (\backslash$$ $669,000\backslash )),$ and produce inventory $(\backslash (\backslash$$ $446,000\backslash )).$ With the remaining cash, Slicenhook invests $\backslash (\backslash$$ $68,000\backslash )$ in the stock of a privately owned graphite research company and retains $(\backslash (\backslash$$ $78,000\backslash ))$ as working cash.

Slicenhook operates on a just$-$in$-$time inventory system, so it sells all inventory and collects all sales immediately. That means that at the end of the year, Slicenhook does not carry any inventory or accounts receivable balances. During $2023,$ Slicenhook has the following operating results:

The partnership is very successful in its first year. The success allows Slicenhook to use excess cash from operations to purchase $\backslash (\backslash$$ $84,000\backslash )$ of tax$-$exempt bonds $($you can see the interest income already reflected in the operating results$).$ The partnership also makes a principal payment on its loan from Big Bank in the amount of $\backslash (\backslash$$ $300,000\backslash )$ and a distribution of $\backslash (\backslash$$ $100,000\backslash )$ to each of the partners on December $31,2023.$

The partnership continues its success in $2024$ with the following operating results:

The operating expenses include a $\backslash (\backslash$$ $2,950\backslash )$ trucking fine that one of its drivers incurred for reckless driving and speeding and meals expense of $\backslash (\backslash$$ $6,000\backslash )($the meals were not provided by a restaurant$).$

By the end of $2024,$ Reed has had a falling out with Carrie and Doug and has decided to leave the partnership. He has located a potential buyer for his partnership interest, Indie Ruff. Indie has agreed to purchase Reed's interest in Slicenhook for $\backslash (\backslash$$ $1,098,000\backslash )$ in cash and the assumption of Reed's share of Slicenhook's debt. Carrie and Doug, however, are not certain that admitting Indie to the partnership is such a good idea. They want to consider having Slicenhook liquidate Reed's interest on January $1,2025.$ As of January $1,2025,$ Slicenhook has the following assets:

Carrie and Doug propose that Slicenhook distribute the following to Reed in complete liquidation of his partnership interest:

Slicenhook has not purchased or sold any equipment since its original purchase just after formation.

Comprehensive Problem $16-63$ Part a $($Algo$)$

a$.$ Determine each partner's recognized gain or loss upon formation of Slicenhook.

Note: Leave no answers blank. Enter zero if applicable.