On May 1, 2022, AA and BB formed a partnership with each contributing the following assets: Partner AA: Cash, P300,000 Machinery and equipment, P250,000 Furniture and fixtures, P100,000 Partner BB: Cash, P700,000 Machinery and equipment, P750,000 Building, P2,250,000 The building is subject to a mortgage loan of P800,000, which will not be assumed by the partnership. What is the capital balance of partner BB upon formation?

On May 1, 2022, AA and BB formed a partnership with each contributing the following assets: Partner AA: Cash, P300,000 Machinery and equipment, P250,000 Furniture and fixtures, P100,000 Partner BB: Cash, P700,000 Machinery and equipment, P750,000 Building, P2,250,000 The building is subject to a mortgage loan of P800,000, which will not be assumed by the partnership. What is the capital balance of partner BB upon formation?

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

On January 1, FRED and GEMMO formed a partnership by contributing cash of P405,000 and P270,000, respectively. On February 1. Fred contributed an additional P135,000. On May 1, Gemmo contributed machinery with a fair market value of P90,000 and a net book value/cost of P75,000 when contributed. On November 1 Gemmo contributed an additional P45,000 cash to the partnership. Profit or loss agreement are as follows: • Interest at 6% is allowed on average capital balances; • Salaries of P2,700 per month to each partner; • Bonus to Fred of 10% of net income; and • Balance to be divided in the ratio of 6:4 to Fred and Gemmo, respectively. ASSUMPTIONS: 1. The company had a revenue of 458,300 and expenses of 227, 900 resulting in a profit of 257,400. 2. The company had a revenue of 227, 900 and expenses of 458,300 resulting in a loss of 257,400. 3. The company had a revenue of 458,300 and expenses of 406,325 resulting in a profit of 51,975. Required: 1. Table showing the computation of average…
Shirley contributes property to a new partnership with a value of $1,000,000 and a basis of $400,000 that is secured by a $500,000 nonrecourse note. Under the terms of the partnership agreement, Shirley will be allocated 25% of all profits. The partnership agreement also states that "excess nonrecourse liabilities" will be allocated to partners according to profit ratios. How much of the nonrecourse liability will be allocated to Shirley? please dont provide answer in images thank you
On April 30, 2021, AAA admits BBB for an interest in his business. On this date, AAA's capital account shows a balance of P 158,400. The following were agreed upon before the formation of the partnership: Prepaid expenses of P17,500 and accrued expenses of P5,000 are to be recognized. 5% of the outstanding accounts receivable of AAA amounting to P100,000 is to be recognized as uncollectible. BBB is to be credited with a one-third interest in the partnership and is to invest cash. Determine the amount of cash to be invested by BBB:
On May 1, 2022, AA and BB formed a partnership, agreeing to share profits and losses in the ratio of 2:4, respectively. AA invested a portion of land, acquired at P300,000, which was sold immediately at P500,000. BB invested cash of P1 million. How much should be the capital balance of AA right after the partnership formation? O P1,000,000 O P500,000 OP300,000 O P400,000
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?
A, B and C decided to form ABC Partnership on January 1, 2022.. . It was agreed that A will contribute an equipment with historical cost of P800,000 and accumulated depreciation of P500,000. On the date of formation, the fair value of equipment was P400,000. B will contribute an automobile with carrying amount of P1,200,000 and fair value of P1,500,000. The automobile is subject to a loan payable amounting to P300,000 to be assumed by the partnership. The partners agreed that C will have to contribute cash equal to half of B's capital. Compute the total capital of the partnership.
On April 1, 2019 the balance in Jimin’s capital account should be in what amount?Required to answer. Single choice.
The condensed statement of financial position of the partnership of Buenaflor and Gangoso as of December 31, 2020 showed the following: Total assets P 200, 000Total liabilities 40, 000Buenaflor, Capital 80, 000Gangoso, Capital 80, 000 On this date, the partnership was dissolved and its net assets transferred to a newly formed corporation.The fair value of the assets was P 24, 000 more than the carrying value on the firm’s books. REQUIRED: Prepare the journal entries in the books of the corporation with P 1 par ordinary share.
On July 1, 2020, X, Y and Z formed a partnership by combining their separate business proprietorships. X contributed cash of P 200,000. Y contributed property with a carrying amount of P144,000, original cost of P160,000. and a fair value of P320,000. The partnership accepted responsibility for the P140,000 mortgage attached to the property. Z contributed equipment with a carrying amount of P120,000, original cost of P300,000 and fair market value of P220,000. The partnership agreement specifies that profits and losses are to be shared equally. How much is the investment of Y?*
On July 1, 2019, Olga, Mega and Giga formed the OMG Partnership, by combining their separate business proprietorships. Olga contributed cash of P150,000. Mega contributed property with a carrying amount of P108,000, original cost of P120,000. and a fair value of P240,000. The partnership accepted responsibility for the P105,000 mortgage attached to the property. Giga contributed equipment with a carrying amount of P90,000, original cost of P225,000 and fair market value of P165,000. The partnership agreement specifies that profits and losses are to be shared equally. How much is the investment of Mega? Using the information in no. 2, and assuming capital are based on their profit and loss agreement, how much is the implied bonus? *
ces Gorman and Morton form a partnership on May 1, 2022. Gorman contributes cash of $73,000; Morton conveys title to the following properties to the partnership: Equipment Licensing agreements Book Value $ 26,500 46,500 Fair Value $51,000 59,000 The partners agree to start their partnership with equal capital balances. No goodwill is to be recognized. According to the articles of partnership written by the partners, profits and losses are allocated based on the following formula: Gorman receives a compensation allowance of $1,300 per month. All remaining profits and losses are split 40.60 between Gorman and Morton, respectively. Each partner can make annual cash drawings of $5,000 beginning in 2023. Net income of $22,500 is earned by the business during 2022. Steele is invited to join the partnership on January 1, 2023. Because of her business reputation and financial expertise, she is given a 40 percent interest for $77,000 cash. The bonus approach is used to record this investment,…
Anthony is investing in a partnership with Joseph. Anthony contributes equipment that originally cost $43000, has a book value of $20900, and a fair value of $25400. The entry that the partnership makes to record Anthony's initial contribution includes a O debit to Equipment for $22100. ○ credit to Accumulated Depreciation for $22100. O debit to Equipment for $43000. O debit to Equipment for $25400.