James and Laura are forming a partnership.James will invest a truck with a book valueof Pi0,000 and a fair market value ofP14,000. Laura will invest a building with abook value of P30,000 and a fair marketvalue of P42,000 with a mortgage ofP15,000. At what amount should thebuilding be recorded? *

The assets invested by partners in the partnership are recorded at thw fair value or market value of…

Answered: James and Laura are forming a…

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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Anne Murray is planning to buy a rental property, in addition to the family home she and Henry own. She is considering a property in Bristol costing £210,000. She has savings of £85,000 which she will use as a deposit but will need to borrow the remaining amount for the purchase. She has had a fixed-rate mortgage agreed in principle by Royal East Bank, for which she will be charged 4.75% interest. She wants to know what income she might expect to get on her investment. Local agents have estimated that the monthly rent may be £1,450 per month, with agent’s fees for managing the property being charged at 5% of the rent. Provide Anne with an estimate of the relevant costs of renting the property and the net rental income that she might expect to get. Anne has estimates for some of the other costs she will incur as follows: Repairs and maintenance per year £700 Property insurance per year £395 Mortgage arrangement fee £1950…
Shawna Kearn and Todd White are forming a partnership to develop a theme park near Bay City, Florida. Kearn contributes cash of $1,000,000 and land with a current market value of $13,500,000. When Kearn purchased the land in 2013, its cost was $7,500,000. The partnership will assume Kearn's $3,000,000 note payable on the land. White contributes cash of $3,000,000 and equipment with a current market value of Requirements 1. Journalize the partnership's receipt of assets and liabilities from Kearn and from White. 2. Compute the partnership's total assets, total liabilities, and total partners' equity immediately after organizing.
Anne Murray is planning to buy a rental property, in addition to the family home she and Henry own. She is considering a property in Bristol costing £210,000. She has savings of £85,000 which she will use as a deposit but will need to borrow the remaining amount for the purchase. She has had a fixed-rate mortgage agreed in principle by Royal East Bank, for which she will be charged 4.75% interest. She wants to know what income she might expect to get on her investment. Local agents have estimated that the monthly rent may be £1,450 per month, with agent’s fees for managing the property being charged at 5% of the rent. Provide Anne with an estimate of the relevant costs of renting the property and the net rental income that she might expect to get. Anne has estimates for some of the other costs she will incur as follows: Repairs and maintenance per year £700 Property insurance per year £395 Mortgage arrangement fee £1950…
Cindy, Casey, and Kara each invested $48,500 in a real estate venture. The partnership borrowed $258,000 and purchased a warehouse for $403,500. The note was secured by the building; there was no personal recourse against the partners. Required: What is each partner’s beginning at-risk amount in the venture?
Karasuma and Irina are partners who have capitals of P6,000 and P4,800 and who share profits in the ratio of 3:2. Koro is admitted as a partner upon investing cash of P5,000, with profits to be shared equally. Assume that Koro is allowed a 40% interest in the firm. What entries would be made in recording the investment if the asset revaluation method is used? What entries would be made if the bonus method is used? Which method will be preferred by Koro? How much will Koro gain by the use of this method?

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