Question 3 Abmad, Sami, and Barhoom formed a partnership named ASB House improvement Center on 1/1/2017. They contributed the following to the new company: Net Book value ($) Fair market value/ Agreed upon value (S) Ahmed's contribution: Cash Land Sami's contribution: 40,000 40,000 80,000 50,000 22,000 32,000 3,000 Cash Equipment Supplies Barhoom's contribution: Cash 22,000 28,000 2,600 Truck Accounts receivable Allowance for doubtful accounts 12,000 20,000 6,500 600 12,000 15,000 6,500 800 Required: Prepare the journal entry for the formation of the partnership. You can prepare separate entries or one entry. Account title

Question 3 Abmad, Sami, and Barhoom formed a partnership named ASB House improvement Center on 1/1/2017. They contributed the following to the new company: Net Book value ($) Fair market value/ Agreed upon value (S) Ahmed's contribution: Cash Land Sami's contribution: 40,000 40,000 80,000 50,000 22,000 32,000 3,000 Cash Equipment Supplies Barhoom's contribution: Cash 22,000 28,000 2,600 Truck Accounts receivable Allowance for doubtful accounts 12,000 20,000 6,500 600 12,000 15,000 6,500 800 Required: Prepare the journal entry for the formation of the partnership. You can prepare separate entries or one entry. Account title

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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Problem 14-50 (LO 14-1, 14-4) Dennis, Suzy, and Katherine form a partnership. Dennis and Suzy give equipment and a building, respectively. Katherine agrees to perform all of the accounting and office work in exchange for a 10% interest. Dennis's equipment Suzy's building Katherine's services Required: FMV $ 100,000 $ 100,000 $ 0 Basis $ 10,000 $ 45,000 Partnership 45% 451 $ 0 10% a. What amount of gain, if any, do each of the partners recognize? b. What is the basis for each partner in his or her partnership interest? c. What is the basis to the partnership of each asset? Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required a Required b Required c What amount of gain, if any, do each of the partners recognize? Partner Dennis Suzy Gain $ 10,000 $ 45,000 Katherine $ 20,000 Required a Required b>
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Chapter 2: Partnerships Exercise - 1 Computing initial partner investments Careem and Labeeb establish an equal partnership in both cquity and profits to operate a used- furniture business under the name of C&L Furniture. Careem contributes furniture inventory that cost $120,000 and has fair value of $160,000. Labceb contributes $60,000 cash and delivery cquipment that cost $80,000 and has a fair valuc of $60,000. Required: Assume that the initial noncash contributions of the partners are recorded at fair market value. A) Compute the ending balance of cach capital account under the bonus and goodwill approaches. B) Prepare the journal entries of the initial investments under both approaches.
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1 John and Mary are equal partnership in a partnership. John's beginning basis is 50,000 and Mary's beginning basis is 70,000 Sales 200,000 Long term capital gain Short term capital loss 6,000 -4,000 Dividend income 2,000 salaries 50,000 Rent Expense 20,000 Interest income 5,000 Depreciation Section 179 expense 30,000 20,000 Distribution to Mary 40,000 Distrbution to John 30,000 1 Calculate ordinary income 2 Calculate Separately Reported Items 3 Calculate ending basis for John and Mary.