Jun and Ramon are partners in a real estate partnership. The partnership owns a piece of land whichGeneroso desired to buy. Generoso contacted Jun and inform him his desire to buy the land and Jun did nottell Ramon about it. Jun bought Ramon out of the partnership and afterwards sold the land to Generosowith a big profit.@ The sale of the land to Generoso is void because it was without the knowledge of RamonO The partnership is dissolved when Jun became the sole ownerO Jun is not liable to Ramon for the latter's share in the profitsO Jun is liable to Ramon for the lalter's share in the profitsNextPrevious

In this case, Jun is liable to Ramon for the latter's share in the profits. It was a Partnership…

Answered: Jun and Ramon are partners in a real…

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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Debra and Merina sell electronic equipment and supplies through their partnership. They wish to expand their computer lines and decide to admit Wayne to the partnership. They share income in a ratio of 3:2. Debra Merina $ 200,000 160,000 Required: . Debra and Merina agree that some of the inventory is obsolete.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 list Journal entry worksheet < A B Record the admission of Wayne.
Ray and Carin are partners in an accounting firm. The partners have entered into an arm's length agreement requiring Ray to purchase Carin's partnership interest from Carin's estate if she dies before Ray. The price is set at 120% of the book value of Carin's partnership interest at the time of her death. Ray purchased an insurance policy on Carin's life to fund this agreement. After Ray had paid $45,000 in premiums, Carin was killed in an automobile accident and Ray collected $800,000 of life insurance proceeds. Ray used the life insurance proceeds to purchase Carin's partnership interest. Question Content Area a. What amount should Ray include in his gross income from receiving the life insurance proceeds? Question Content Area b. The insurance company paid Ray $16,000 interest on the life insurance proceeds during the period Carin's estate was in administration. During this period, Ray had left the insurance proceeds with the insurance company. Is this…
Palit buys Quincy's partnership interest in the Q-R-S partnership. Quincy thus retires, leaving Reale and Susien as Palit's co-partners. Prior to Palit entering the partnership, Quincy, Reale, and Susien split profits and losses equally. Palit pays P75,000 for Quincy's capital which, at the time, totaled P60,000. No revaluation of partnership assets or liabilities occurs at the time. In recording this event on the partnership books a. Goodwill is booked based on the book value/fair value difference. b. P7,500 bonuses are added to Reale and Susien capital. c. P5,000 bonuses are added to Quincy, Real, and Susien capital. d. Palit capital is created in the amount of P60,000.
Gale, McLean, and Lux are partners of Burgers and Brew Company with capital balances as follows: Gale, $96,000; McLean, $93,000; and Lux, $159,000. The partners share profit and losses in a 3:2:5 ratio. McLean decides to withdraw from the partnership. Prepare General Journal entries to record the May 1, 2020, withdrawal of McLean from the partnership under each of the following unrelated assumptions: a. McLean sells his interest to Freedman for $180,000 after Gale and Lux approve the entry of Freedman as a partner (where McLean receives the cash personally from Freedman). •1 Record the admission of Freedman. b. McLean gives his interest to a son-in-law, Park. Gale and Lux accept Park as a partner. •1 Record the admission of Park. c. McLean is paid $93,000 in partnership cash for his equity. •1 Record withdrawal of McLean, where he is paid $93,000 in partnership cash for his equity. d. McLean is paid $144,000 in partnership cash for his equity. •1 Record the withdrawal of…
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Jimmy, Matt, and Jay are in the process of forming a partnership. According to their partnership agreement, Jimmy is to invest $100,000 and devote one-half time to the partnership, Matt is to invest $50,000 and devote three-fourths time to the partnership, and Jay is to make no investment and devote full time to the partnership. If the partnership encounters any liability that exceeds partnership assets, what is Jay's potential liability for the debts of the partnership, if any, and why? For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac). В I U S Paragraph Open Sans,s... v 10pt A v Ix 田田図 ABC - 田用图 P O WORDS POWERED BY TINY II +] III
Steve Reese is a well-known interior designer in Fort Worth, Texas. He wants to start his own business and convinces Rob O’Donnell, a local merchant, to contribute the capital to form a partnership. On January 1, 2019, O’Donnell invests a building worth $74,000 and equipment valued at $44,000 as well as $32,000 in cash. Although Reese makes no tangible contribution to the partnership, he will operate the business and be an equal partner in the beginning capital balances. To entice O’Donnell to join this partnership, Reese draws up the following profit and loss agreement: O’Donnell will be credited annually with interest equal to 10 percent of the beginning capital balance for the year.O’Donnell will also have added to his capital account 10 percent of partnership income each year (without regard for the preceding interest figure) or $6,000, whichever is larger. All remaining income is credited to Reese.Neither partner is allowed to withdraw funds from the partnership during 2019.…
Renee and George do business as the OP Partnership, sharing profits and losses equally. George is a material participant in the partnership, and the partnership has no outstanding debt. All parties use the calendar year for tax purposes. On January 1 of the current year, George's basis in the partnership was $150,000; he made no withdrawals from the partnership during the year. The partnership sustained an operating loss of $500,000 in the current year. George's personal income tax return for the current year should include a) an ordinary loss of $150,000. b) an ordinary loss of $250,000. c) an ordinary loss of $150,000 and a capital loss of $100,000. d) an ordinary loss of $100,000 and a capital loss of $150,000. e) None of the above
Lucy sells her partnership interest, a passive activity, with an adjusted basis of $362,500 for $398,750. In addition, she has current and suspended losses of $54,375 associated with the partnership and has no other passive activities. a. Calculate Lucy's total gain and her current deductible loss.Her total gain is_______and her deductible loss is_______. b. What type of income can the deductible loss offset?Lucy's deductible loss is offset against________

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