Debra and Merina sell electronic equipment and supplies through their partnership. They wish to expand their computerlines and decide to admit Wayne to the partnership. They share income in a ratio of 3:2.DebraMerina$ 200,000160,000Required:. Debra and Merina agree that some of the inventory is obsolete. The inventory account is decreased before Wayne is admitted.Wayne invests $100,000 for a 25 percent interest.Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.View transaction listJournal entry worksheet< ABRecord the admission of Wayne.

First, we compute the total partnership capital after the admission of Wayne. That would be the…

Answered: Debra and Merina sell electronic…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Jacob, Susan, and Cody each have a $330,000 capital balance. They share profits and losses as follows: 2:6:2 to Jacob, Susan, and Cody, respectively. Suppose Cody is withdrawing from the business. Requirements 1. Journalize the withdrawal of Cody if the partnership agrees to pay Cody $330,000 cash. 2. Journalize the withdrawal of Cody if the partnership agrees to pay Cody $210,000 cash. ..... Requirement 1. Journalize the withdrawal of Cody if the partnership agrees to pay Cody $330,000 cash. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.) Date Accounts and Explanation Debit Credit
Barry and Kurt are equal partners in the BK partnership. Barry receives a guaranteed payment of $57,000. In addition to the guaranteed payment, Barry withdraws $11,000 from the partnership. The partnership has $25,600 in ordinary income during the year. a. How much income must Barry report from the BK partnership? b. What is the effect of the distribution on Barry's partnership basis? a. income to Barry b. Barry's partnership basis
Please do not provide solution in image formate thank you. A, B, C, and D are equal partners in the ABCD partnership. The partnership’s current balance sheets are as follows. Partner A agrees to sell her interest in the partnership to new partner E for $2,500 in cash, plus assumption of her $4,500 share of partnership debt. A’s tax basis in her partnership interest is$5,500 ($1,000 tax capital account plus $4,500 share of partnership debt). The selling price of her interest is $7,000 ($2,500 cash plus $4,500 debt relief). Thus, she has a $1,500 gain on the sale. Required Calculate A’s ordinary income and capital gain income on the sale of her partnership interest.
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Jerry and Sherry own and operate a partnership. Jerry's capital balance is $50,000 and Sherry's is $55,000. Jerry and Sherry decided to admit a new partner, Allison, to their partnership. By the terms of their partnership agreement, Jerry and Sherry share income/ loss equally, Allison intends to contribute $40,000 to receive a Twenty-five percent interest in the partnership. Required: a. Revalue the partnership assets b. Determine the total equity of the partnership after the new partner is admitted c. Determine the new partner's share of the total equity d. Determine the bonus resulting from Allison's equity of her contribution e. Make journal entries to rccord Allison's admission to the partnership
Jack contributes the following asset to a new partnership: Land – FMV $200,000; Mortgage $80,000; Tax Basis $100,000. How much cash should Jill contribute to make this an equitable 50/50 partnership? what is Jack's partnership interest basis? What is Jill's partnership interest basis? the partnership sells the land. What is the tax result to each partner? What is each of their bases following the sale of the land? -
Moe, Larry and Curley are partners in a partnership. The partners have always shared losses and Gains in a 3: 2: 1 ratio and on the date of Curley's retirement they have the following equities in the partnership: Moe 24,000 Larry : 30,000 Curley 18,000 Using Today's Date Give in General Journal Form the entry showing the retirement of Curley under the following unrelated assumptions: 1. Curley retires taking $18,000 of cash with him for his equity 2. Curley retires taking 20,000 of partnership cash with him
Prior to liquidating their partnership, Sam and Brian had capital accounts of $60,000 and $240,000, respectively. The partnership assets were sold for $120,000. The partnership had no liabilities. Sam and Brian share income and losses equally Determine the amount of Sam’s deficiency. Determine the amount distributed to Brian, assuming Sam is unable to satisfy the deficiency. Show your work:
Michael invests in Buxus Interests, a partnership. Michael's capital contribution to the partnership consists of $10,000 cash and equipment with an adjusted basis of $120,000 (fair market value of $150,000) subject to a nonrecourse liability of $60,000. a. Calculate the amount that Michael is at-risk in the activity after making the above contribution? b. If Michael's share of the partnership loss in the year after he makes the contribution is$150,000, how much of the loss may be deducted in that year (before considering thelimitations on passive losses)? Assume the partnership had no other transactions. c. If Michael has any nondeductible loss in part b, what may Michael do with thenondeductible loss?
The partnership of Michelle, Amal, and Maureen has done well. The three partners have shared profits and losses in a 1:3 ratio, with capital balances of $60,000 each. Maureen wants to retire and withdraw. Prepare a schedule showing how the cost should be divided if Amal and Michelle decide to pay Maureen $70,000 for retirement of her capital account and the new agreement will share profits and losses 50:50.
Jessica and Rufus admit Jose as a 25% partner for a contribution of $120, 000 Jessica has capital and a profit /loss ratio of $280, 000 and 70%, respectively. Rufus has capital and a profit/loss ratio of $150, 000 and 30%, respectively. The three parties agree that some of the partnership's investment assets are overvalued. What is the entry to correct this overvaluation? (You do not need to write the entry to admit Jose.) don't use ai answer,i will 5 upvotes
On November 30, capital balances are Richard $716000, Lagassi $596000 and Kelly $596000. The income ratios are 20%, 20% and 60% respectively. Richard decides to retire from the partnership. In order for Lagassi and Kelly to have equal capital interests after the retirement of Richard, how much partnership cash would have to be paid to Richard for her partnership interest? Any amount paid to Richard will cause Lagassi and Kelly to still have equal capital balances. $636000. $716000. O $0.

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