Dewey, Huey, and Louie created the Sleepy Times partnership to sell pajamas. TheSleepy Times partnership has the following balance sheet:Unrealized receivablesInventoryLandCapital, DeweyCapital, HueyCapital, LouieBasis0120,00060.000$180,000$60,00060,00060.000$180,000beFMV$30,000150,00090.000$270,000$90,00090,000At his request, Dewey receives a distribution consisting of % of the unrealizedreceivables and % of the inventory, reducing his interest in the partnership from1/3 to 1/5. You are going to calculate the tax effects of this distribution toDewey and the partnership.Under 751(b), Dewey is first treated as having been distributed $AV of land in a hypothetical90.000$270,000distribution.Dewey's basis in the hypothetically distributed land is $Sleepy Times is treated as having bought back the land with $A/A/ of unrealized receivables and $of inventory.Dewey will have a gain on the IRC Sec. 751(b) exchange of $A/and the character of the gain willSleepy Times will have a gain on the IRC Sec. 751(b) exchange of $A/ and the character of the gain will beDewey's total basis in the inventory distributed (from the 751(b) exchange and thenormal distribution) is $A/Dewey's total basis in the unrealized receivables distributed (from the 751(b)exchange and the normal distribution) is $AVDewey's remaining basis in his partnership interest is $The Sleepy Times partnership will have a basis in the land of $

Dewey, Huey, and Louie have formed the Sleepy Times Partnership to sell pajamas. The partnership's…

Dewey, Huey, and Louie created the Sleepy Times partnership to sell pajamas. The Sleepy Times partnership has the following balance sheet: Unrealized receivables Inventory Land Capital, Dewey Capital, Huey Capital, Louie Basis 0 120,000 60.000 $180,000 $60,000 60,000 60.000 $180,000 FMV $30,000 150,000 90,000 $270,000 $90,000 90,000 90.000 $270,000 At his request, Dewey receives a distribution consisting of % of the unrealized receivables and % of the inventory, reducing his interest in the partnership from 1/3 to 1/5. You are going to calculate the tax effects of this distribution to Dewey and the partnership. Under 751(b), Dewey is first treated as having been distributed $

Dewey, Huey, and Louie created the Sleepy Times partnership to sell pajamas. The Sleepy Times partnership has the following balance sheet: Unrealized receivables Inventory Land Capital, Dewey Capital, Huey Capital, Louie Basis 0 120,000 60.000 $180,000 $60,000 60,000 60.000 $180,000 FMV $30,000 150,000 90,000 $270,000 $90,000 90,000 90.000 $270,000 At his request, Dewey receives a distribution consisting of % of the unrealized receivables and % of the inventory, reducing his interest in the partnership from 1/3 to 1/5. You are going to calculate the tax effects of this distribution to Dewey and the partnership. Under 751(b), Dewey is first treated as having been distributed $

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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The A Company whose ending capital is P89,000 will be joined by Mr. B to form a partnership. Mr. B is to invest sufficient cash to have 30% interest in capital and in interest after following the following adjustment of the accounts of The A Company: Merchandise inventory will be increased by P3,500, supplies amounting to P2,500 is fully consumed and the Equipment purchased for P61,000 which has a book value P55,000 should be 90% depreciated. B is to invest?
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The following were the balances of the partnership between Crayon and Pencil as at 31 Question 2 December 2009: DR Capital on 2 January 2009 Crayon Pencil CR 30 000 30 000 Current accounts on 1 January 2009 Crayon Pencil 1 500 200 Drawings during the year Crayon Pencil 6 000 4 400 .160 000 Land and building... Equipment... Cash and bank... .15 000 ..20 000 Bank loan.... .90 000 ..1 400 .40 000 Electricity.. Office salaries.... Advertising.. Bad debts.... .30 000 ... 700 Provision for bad debts.. 700 Debtors.... ...6 000 Creditors.... Provision for depreciation: equipment... Stock on 31 December 2009..... Gross profit for the year.... .9 500 ..2 000 .30 000 ..150 000 Additional information available includes: i. The provision for bad debts is to be increased by $50 ii. The amount of advertising includes a payment of $120 for 2004 iii. There is an electricity bill of $145 due iv. Equipment is to be depreciated at 20% on cost per annum v. Interest on capital is allowed at 20% per annum…
The capital accounts and profit and loss ratio of A and B are shown below: Capital Profit and Loss ratio P 60,000 40,000 P 100,000 50% 50% 100% A в Give the journal entries under the following cases: 1. C purchases one-half interest of A for P35,000. 2. B sells one-fourth of his interest to C for P12,000. 3. C purchases one-half interest of both A and B for P55,000 (use two methods) 4. C invests P20,000 for a one-sixth interest in the new firm. The agreeed new capital is p120,000. 5. C invests P40,000 for a one-fourth interest in the new firm. 6. C invests P35,000 for a one-fourth interest in the new firm with agreed capitalization of *135,000. 7. Cinvests P35,000 for a one-fourth interest in the firm. The agreed new capital is P140,000. After the admission of C, the capital con- tributions must be made equal to the new profit and loss ratio. 8. Cinvests P40,000 for a one-third interest in the firm with a total new capital of P150,000.
The Drysdale, Koufax, and Marichal partnership has the following balance sheet immediately prior to liquidation: Cash $ 61,000 Liabilities $ 55,000 Noncash assets 329,000 Drysdale, loan 42,500 Drysdale, capital (50%) 107,500 Koufax, capital (30%) 97,500 Marichal, capital (20%) 87,500 a-1. Determine the maximum loss that can be absorbed in Step 1. Then, assuming that this loss has been incurred, determine the next maximum loss that can be absorbed in Step 2. a-2. Liquidation expenses are estimated to be $21,000. Prepare a predistribution schedule to guide the distribution of cash. Further, modify the tags in explanation as well. b. Assume that assets costing $99,000 are sold for $72,500. How is the available cash to be divided?
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The partnership of H, M and R is liquidating and the ledger shows the following:Dr. Cash- P80,000Dr. Inventories- P100,000Cr. Accounts payable- P60,000Cr. H, Capital (50%)- P45,000Cr. M, Capital (25%)- P40,000Cr. R, Capital (25%)- P35,000If all cash available is distributed immediately: a. M should get P15,000 and R should get P5,000 b. M should get P12,500, and R should get P7,500 c. each partner should get P6,667 each d. each partner should get P26,667 each
A and B entered into a partnership agreement in which A is to have 55% interest in the partnership and 35% in the profits and losses, while B will have 45% interest in the partnership and 65% in the profits and losses. A contributed the following: Cost Fair value Building P235,000 P255,000 Equipment 168,000 156,000 Land 500,000 525,000 The building and the equipment have a mortgage of P50,000 and P35,000 respectively. B is to contribute P150,000 cash and an equipment. The partners agreed that only the building mortgage will be assumed by the partnership. How much is the fair market value of the equipment which B contributed?
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blanaces of accounts for M&M partnership are cash 34000 account payable (27000) loan to Matter (7000) Matter capital 8000 Mansour capital (8000) avaliable cash should distributed as follows after payment 25000 to account payables: ○ A. 7000 to Mansour O B. 7000$ for loan of Matter O c. $3500 each to Matter and Mansour OD. 1000 to Matter and 7000 to Mansour
The Drysdale, Koufax, and Marichal partnership has the following balance sheet immediately prior to liquidation: Cash $ 37,000 Liabilities $ 49,000 Noncash assets 209,000 Drysdale, loan 12,500 Drysdale, capital (50%) 71,500 Koufax, capital (30%) 61,500 Marichal, capital (20%) 51,500 a-1. Determine the maximum loss that can be absorbed in Step 1. Then, assuming that this loss has been incurred, determine the next maximum loss that can be absorbed in Step 2. a-2. Liquidation expenses are estimated to be $16,000. Prepare a predistribution schedule to guide the distribution of cash. Further, modify the tags in explanation as well. b. Assume that assets costing $75,000 are sold for $60,500. How is the available cash to be divided?