Hill, Williams, and Kelce are partners and share income in a 1:2:2 ratio (in ratio form: Hill, 1/5; Williams, 2/5; Kelce, 2/5). The partnership's capital balances are as follows: Hill, $21,000, Williams $33,000 and Kelce $60,000. Hill decides to withdraw from the partnership and agrees to take $15,000 cash in payment of his capital balance. The journal entry to record the withdrawal contains a: Multiple Choice Debit to Cash for $15,000. Credit to Hill, Capital for $21,000. Debit to Hill, Withdrawals for $21,000. Credit to Capital, Kelce for $3,000. Credit to Cash for $21,000. 4

Hill, Williams, and Kelce are partners and share income in a 1:2:2 ratio (in ratio form: Hill, 1/5; Williams, 2/5; Kelce, 2/5). The partnership's capital balances are as follows: Hill, $21,000, Williams $33,000 and Kelce $60,000. Hill decides to withdraw from the partnership and agrees to take $15,000 cash in payment of his capital balance. The journal entry to record the withdrawal contains a: Multiple Choice Debit to Cash for $15,000. Credit to Hill, Capital for $21,000. Debit to Hill, Withdrawals for $21,000. Credit to Capital, Kelce for $3,000. Credit to Cash for $21,000. 4

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Hansen and Fleming are partners and share equally in income or loss. Hansen’s current capital balance in the partnership is $125,000 and Fleming’s is $124,000. Hansen and Fleming agree to accept Black with a 20% interest. Black invests $75,000 in the partnership. The bonus granted to Hansen and Fleming equals
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
Donald and Landry are partners who share income and losses in the ratio of 3:2, respectively. On August 31, their capital balances were: Donald, $145000 and Landry, $124000. On that date, they agree to admit Neumark as a partner with a one-third capital interest. If Neumark invests $169000 in the partnership, what is Landry's capital balance after Neumark's admittance? $130900 ○ $124000 $146000 ○ $133200
The partnership agreement of Gibbs and Reed has the following provisions: Salary allowances are $20,000 for Gibbs and $30,000 for Reed. No interest is given on the partners’ capital balances. Any income/loss greater than the salary allowances is divided using a 2:3 ratio. Revenues of $130,000 and expenses of $62,000 resulted in net income for the first year of operations of $68,000. Calculate the net income distributed to each partner.
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
Hannah, Rose, and Rachael form an equal general partnership. Hannah and Rose each contribute $40,000 cash. Rachael contributes land with a basis of $48,000 and a fair market value of $100,000, subject to a nonrecourse liability of $60,000. Under section 752, assume that the liability will be allocated to the partners as follows: Hannah ($16,000); Rose ($16,000); and Rachael ($28,000). Prepare the partnership’s books following formation. *hint* - a partner’s tax capital account can be negative Assets Book Tax Liabilities Book Tax Capital Book Tax Determine each partner’s outside basis in the partnership.
B. Higgins, J. Mayo, and N. Rice have capital balances of $93,500, $83,000, and $63,000, respectively. They share income or loss on a 5:3:2 basis. Rice withdraws from the partnership under each of the following conditions. 1. Rice is paid $68,200 in cash from partnership assets, and a bonus is granted to the retiring partner. 2. Rice is paid $55,400 in cash from partnership assets, and bonuses are granted to the remaining partners. Journalize the withdrawal of Rice under each of the assumptions above. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) No. Account Titles and Explanation Debit Credit 1. N. Rice, Capital 2. B. Higgins, Capital J.Mayo, Capital Cash N. Rice, Capital B. Higgins, Capital J.Mayo, Capital Cash >
Coy and Matt are equal partners in the Matcoy Partnership. Each partner has a basis in his partnership interest of $33,000 at the end of the current year, prior to any distribution. On December 31, each receives an operating distribution. Coy receives $13,000 cash. Matt receives $3,850 cash and a parcel of land with a $9,150 fair market value and a $5,000 basis to the partnership. Matcoy has no debt or hot assets. a. What is Coy's recognized gain or loss? What is the character of any gain or loss?
Friends Partnership has three partners. The balance of each partner capital is: Alia $48,000, Mariam $50,000 and Fatima $52,000. Alia withdraws from the Partnership. The remaining partners, Mariam and Fatima, agreed to pay cash of $58,000 for Alia from partnership. The partners share income and loss equally, Required How much is the capital balance for the remaining partners Mariam and Fatima after the withdrawal of Alia, Please DO NOT use the "$" and "," signs In you sewr. For example, if the right answer is Mariam $75,000 and Fatima $85,000, it should be EXACTLY written as: 75000 85000 Mariam Fatima
Wright, Bell, and Edison are partners and share income in a 2:5:3 ratio. The partnership's capital balances are as follows: Wright, $33,000, Bell $27,000 and Edison $40,000. Edison decides to withdraw from the partnership, and the partners agree not to revalue the assets upon Edison's retirement. The journal entry to record Edison's June 1 withdrawal from the partnership if Edison sells his interest to Whitney for $45,000 after the other two partners approve Whitney as partner is: Multiple Choice Debit Edison, Capital $45,000, credit Whitney, Capital $45,000 Debit Edison, Capital $40,000; credit Cash $40,000 Debit Edison, Capital $40,000; debit Wright, Capital $2.500; debit Bell, Capital $2.500; credit Whitney, Capital $45,000 Debit Edison, Capital $40,000, credit Whitney, Capital $40,000 Debit Edison, Capital $40,000, debit Cash $5,000, credit Whitney, Capital $45,000.
Kwaku and Ekua are in partnership sharing profit the ratio 3:2. The net profit for the period was $12,000. Ekua is to receive an annual salary of $2000. there were no drawings during the year and the partners do not provide interest on capital account balances. What will be Kwaku's share of profit?
When Abe's outside basis in the Vacuna Partnership is $211,000, the partnership distributes to him $36,000 cash, three accounts receivable (fair market value of $61,000, inside basis to the partnership of $0), and a parcel of land (fair market value of $484,000, inside basis to the partnership of $420,000). Abe remains a partner in the partnership, and the distribution is proportionate to the partners. If an amount is zero, enter "0". a. Does the partnership recognize a gain or loss as a result of this distribution? (gain, loss, no gain or loss) b. As a result of the distribution, Abe recognizes .(a gain, a loss, neither a gain or loss) c. In what order are the assets distributed to Abe? (land, accounts receivable, cash) Calculate Abe's basis in the land, in the accounts receivable, and in his partnership interest immediately following the distribution.Accounts receivable: Land: Partnership interest: