Questions 4 and 5 are based on the following: For several years, Peejay and Joshua have been operating their own retail pharmacies as sole proprietorships. They decided that several advantages could be gained if they combined their businesses into one operation. They leased a new facility and began operations as a partnership on January 2, 2020. Peejay was able to find a buyer for his prior business and sold it as a going concern. Joshua did not have an opportunity to sell his business so he transferred as many asserts as possible to the new partnership. The following assets were contributed by Peejay and Joshua to start their new business: Peejay Cash Accounts Receivable Inventory Furnishings Ace Dep-Furnishing Office Equipment Acc Dep-Office Equipment Computer System Acc Dep-Computer System Total Accounts Payable (assumed by Partnership) 4. How much is the opening capital of Joshua? A. P396,500 B. P375,000 C. D. 375,000 37,500 Bonus to Joshua 27,825 Bonus from Peejay 375,000 Joshua Book Value 82,000 48,000 225,000 24,000 (12,000) 38,500 (20,000) 23,200 (17,200) 396,500 25,000 Fair Value 82,000 40,000 220,000 8,000 20,000 5,000 C. P350,000 D. P366,500 5. If the partners decided that the agreed capitalization ratio is 4.5:5.5, who will give the bonus and how much? A. 48,750 Bonus from Peejay B. 48,750 Bonus to Peejay 375,000 25,000
Questions 4 and 5 are based on the following: For several years, Peejay and Joshua have been operating their own retail pharmacies as sole proprietorships. They decided that several advantages could be gained if they combined their businesses into one operation. They leased a new facility and began operations as a partnership on January 2, 2020. Peejay was able to find a buyer for his prior business and sold it as a going concern. Joshua did not have an opportunity to sell his business so he transferred as many asserts as possible to the new partnership. The following assets were contributed by Peejay and Joshua to start their new business: Peejay Cash Accounts Receivable Inventory Furnishings Ace Dep-Furnishing Office Equipment Acc Dep-Office Equipment Computer System Acc Dep-Computer System Total Accounts Payable (assumed by Partnership) 4. How much is the opening capital of Joshua? A. P396,500 B. P375,000 C. D. 375,000 37,500 Bonus to Joshua 27,825 Bonus from Peejay 375,000 Joshua Book Value 82,000 48,000 225,000 24,000 (12,000) 38,500 (20,000) 23,200 (17,200) 396,500 25,000 Fair Value 82,000 40,000 220,000 8,000 20,000 5,000 C. P350,000 D. P366,500 5. If the partners decided that the agreed capitalization ratio is 4.5:5.5, who will give the bonus and how much? A. 48,750 Bonus from Peejay B. 48,750 Bonus to Peejay 375,000 25,000
Chapter15: Property Transactions: Nontaxable Exchanges
Section: Chapter Questions
Problem 2RP
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