On March 1, 20x4, CC and FF formed a partnership with each contributing the following assets:CCFFCash...P 30,000 P70,000Machinery.25,00075,000Building..225,000*******Furniture and fixtures...10,000The building is subject to a mortgage loan of P90,000, which is to be assumed by the partnershipagreement provides that CC and FF share profits and losses 30 percent and 70 percent, respectively.On March 1, 20x4, the capital account of FF would showa balance of:

Solution: Capital account of FF Would show balance of = Cash + machinery + building - mortgage loan…

Answered: On March 1, 20x4, CC and FF formed 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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The partnership of Hendrick, Mitchum, and Redding has the following account balances: Cash Noncash assets a Maximum amount b Distributed $ 51,000 136,000 This partnership is being liquidated. Hendrick and Mitchum are each entitled to 30 percent of all profits and losses with the remaining 40 percent going to Redding. Hendrick Mitchum Liabilities Hendrick, capital Mitchum, capital Redding, capital a. What is the maximum amount that Redding might have to contribute to this partnership because of the deficit capital balance? b. How should the $10,000 cash that is presently available in excess of liabilities be distributed? c. If the noncash assets are sold for a total of $51,000, what is the minimum amount of cash that Hendrick could receive? (Do not round intermediate calculations.) Redding C Minimum amount $ 41,000 91,000 71,000 (16,000)
The equal DEF partnership has the following balance sheet:Cash and other assets $400,000Recourse liabilities $100,000Capital – D $100,000Capital – E $100,000Capital – F $100,000The profits and losses are allocated 40% to D, and 30% each to E and F. Under thepartnership agreement there is a capital account deficit restoration provision. Howshould the liability be allocated?
A, B and C decided to form ABC Partnership. It was agreed that A will contribute an equipment with assessed value of P200,000 with historical cost of P1,600,000 and accumulated depreciation of P1,200,000. B will contribute a land and building with book value of P2,400,000 and fair market value of P3,000,000. The land and building is subject to a mortgage payable amounting to P600,000 to be assumed by the partnership. The partners agreed that B will have 60% capital interest in the partnership. They agreed that C will contribute sufficient cash to the partnership. A day after the partnership formation, the equipment was sold for P 600,000. What is the amount of cash contributed by C?
Assume the G&L partnership forms with cash contributions of $100,000 each from G and L. The partnership then borrows $800,000 on a nonrecourse loan and purchases a building on leased land for $ 1,000,000. Assume that the building is rented and that annual cash revenues equal cash expenses but depreciation of $50,000 per year results in a $50,000 annual loss. All items of income, loss, and deduction are shared equally. When is the first year that the partnership will record Partnership Minimum Gain ( PMG)? Please don't use any AI. It's strictly prohibited. Help me out asap Thanks
On June 1, 20x10, HEAD and ACHE decided to form a partnership contributing their existing businesses. The following is taken form their trial balance: HEAD ACHE Cash 250,000 150,000 Receivables (net) 100,000 80,000 Inventory 125,000 150,000 500,000 400,000 Fixed Assets (net) Liabilities 250,000 250,000 The partners agreed on the following: 1. P50,000 of HEAD'S cash represents converted foreign currencies amounting to FC1,000 on December 31, 20x9. The current spot rate of FC1 is equivalent to P53. 2. The receivables of HEAD and ACHE, currently have a net realizable value of 80% it is agreed that their net realizable value must be adjusted to 75%. 3. HEAD's inventory has a NRV of P140,000 and could be currently sold for P200,000. HEAD's machine was purchased last year with a 5-year life. It's estimated current value is 90% of its cost. 5. ACHE's fixed asset has an 80% condition percentage. If bought brand new, its price would be P550,000. 6. The partners are to share in profits and…
Assume the G&L partnership forms with cash contributions of $100,000 each from G and L. The partnership then borrows $800,000 on a nonrecourse loan and purchases a building on leased land for $1,000,000. Assume that the building is rented and that annual cash revenues equal cash expenses but depreciation of $50,000 per year results in a $50,000 annual loss. All items of income, loss, and deduction are shared equally. When is the first year that the partnership will record Partnership
X, Y, and Z are partners sharing profits and losses in the ratio of 5:3:2. During the year, their investments and withdrawals are as follows: Investment of X, Y, and Z for P200,000, P175,000 and P375,000 respectively. Withdrawals of X, Y, and Z amounting to P125,000, P62500 and P62,500 respectively. On December 31, 2021, the partners decided to liquidate their business. After exhausting partnership assets, liabilities of P125,000 remain unpaid. X is personally insolvent. The gain or loss on realization is:
The ABC partnership has three equal partners, A, B, and C, and the following balance sheet: Assets Partner's Capital Adj. Basis FMV Adj. Basis FMV Cash 60,000 60,000 A 70,000 80,000 Cap Asset 1 90,000 60,000 B 70,000 80,000 Cap Asset 2 40,000 60,000 C 70,000 80,000 Cap Asset 3 20,000 60,000 210,000 240,000 210,000 240,000 A receives capital asset #1 in an operating distribution. A has a one-ninth interest worth $20,000 in the partnership capital and profits after the distribution. (a) What results to A and the partnership if there is no §754 election? Reconstruct the balance sheet after the distribution. (b) What results to A and the partnership if the partnership has made a §754 election? Reconstruct the balance sheet after the distribution. (c) How should any basis adjustment be allocated among the partners?
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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