On February 1, 2023, Tessa Williams and Audrey Xie formed a partnership in Ontario. Williams contributed $85,000 cash and Xiecontributed land valued at $125,000 and a small building valued at $185,000. Also, the partnership assumed responsibility for Xie's$135,000 long-term note payable associated with the land and building. The partners agreed to share profit or loss as follows: Williamsis to receive an annual salary allowance of $95,000, both are to receive an annual interest allowance of 15% of their original capitalinvestments, and any remaining profit or loss is to be shared equally. On November 20, 2023, Williams withdrew cash of $65,000 andXie withdrew $50,000. After the adjusting entries and the closing entries to the revenue and expense accounts, the Income Summaryaccount had a credit balance of $165,000.Required:1. Present general journal entries to record the initial capital investments of the partners, their cash withdrawals, and the December 31closing of the Income Summary and withdrawals accounts.

Given below solution Explanation: 1) Journal entries to record the transaction are as follows :-…

Answered: On February 1, 2023, Tessa Williams and…

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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and Sumara started a retailing shop on a partnership. Each of them contributed $500,000 fund to the business. The partnership agreement provides: Both Ali and Sumara are to receive interest at the rate of 5% pa on their capital contribution. Sumara will receive a salary of $95,000 for the management of the shop, as well as superannuation contributions of $15,600. The remainder in profit and loss will be shared Ali 70% and Sumara 30% The accounts for this income year show the following: Income ($) Sales 915,000 Expenses ($) Cost of goods sold 326,000 Interest on capital paid to Ali and Sumara in total 9,000 Salary to Ali 95,000 Concessional Superannuation to Ali 12,000 Rent expense 38,000 Other deductible operating expenses 61,000 Required: Calculate the net income of the partnership. Show the allocation of net income to each of the partners.
Sue and Andrew form SA general partnership. Each person receives an equal interest in the newly created partnership. Sue contributes $16,000 of cash and land with an FMV of $61,000. Her basis in the land is $26,000. Andrew contributes equipment with an FMV of $18,000 and a building with an FMV of $39,000. His basis in the equipment is $14,000, and his basis in the building is $26,000. How much gain must the SA general partnership recognize on the transfer of these assets from Sue and Andrew?
three partners, John, Jim, and Alice form a partnership. John invests $27,500; Jim invests $10,700, and Alice invests $8,400. In addition, Jim performs specific management functions for which he is paid $2,000 from the partnership proceeds. if the partnership earns $176,000, how much will jim receive?
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Dewwy, Screwum, and Howe are forming a partnership. Dewwy is transferring $93,000 of personal cash to the partnership. Screwum owns land worth $27,000 and a small building worth $205,000, which she transfers to the partnership. Howe transfers to the partnership cash of $19,000, accounts receivable of $47,700 and equipment worth $35,000. The partnership expects to collect $45,000 of the accounts receivable. Cash 93000 Dewwy Capital 93000 Equipment 27000 Building 205000 Screwum Capital 232000 Cash 19000 Accounts Recievable 47700 Equipment 35000 Doubtful 2700 Howe Capital 99000 What amount would be reported as total owners’ equity immediately after the investments? I would have expected $99,000 since this was agreed upon. What did I miss in the reading?

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