sVelma and Keota (V&K) is a partnership that is considering two alternative investment opportunities. The first investment opportunitywill have a five-year useful life, will cost $19,680.96, and will generate expected cash inflows of $4,800 per year. The secondinvestment is expected to have a useful life of three years, will cost $12,885.48, and will generate expected cash inflows of $5,000 peryear. Assume that V&K has the funds available to accept only one of the opportunities. (PV of $1 and PVA of $1)Note: Use appropriate factor(s) from the tables provided.Requireda. Calculate the internal rate of return of each investment opportunity.Note: Do not round intermediate calculations.b. Based on the internal rates of return, which opportunity should V&K select?a. First investmenta. Second investmentb. V&K should select theInternal Rate of Return%%

Part 2: Explanation:Step 1: Identify the cash flows for both investments.First Investment: Initial…

Answered: s Velma and Keota (V&K) is 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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Allan and Bobby formed a partnership called the AB Partnership by investing cash of P300,000 and P400,000 respectively. They share profit and loss ratio 2:3. Carlo of Singapore was admitted to the firm with an investment of P500,000 representing a 30% interest. Allan decided to withdraw on June 3, 2022 for a cash settlement of P650,000. The partners decided that assets need not be revalued. How much was total partners' equity after the retirement of Allan?
Jennifer DeVine and Stanley Farrin decide to organize the ALL-Star partnership. DeVine invests $25,000 cash, and Farrin contributes $20,000 cash and equipment having a book value of $5,500. Prepare the entry to record Farrin’s and DeVine’s investment in the partnership, assuming the Ferrin’s equipment has a fair market value of $9,000
Shawna Kearn and Todd White are forming a partnership to develop a theme park near Bay City, Florida. Kearn contributes cash of $1,000,000 and land with a current market value of $13,500,000. When Kearn purchased the land in 2013, its cost was $7,500,000. The partnership will assume Kearn's $3,000,000 note payable on the land. White contributes cash of $3,000,000 and equipment with a current market value of Requirements 1. Journalize the partnership's receipt of assets and liabilities from Kearn and from White. 2. Compute the partnership's total assets, total liabilities, and total partners' equity immediately after organizing.
Carlo invested the following in the partnership being formed with Jamie: Cash of P60,000; Land of P200,000 with an appraised value of P410,000; Store furniture costing P40,000 less accumulated depreciation of P10,000; Mortgage note payable P15,000 plus accrued interest for a year at 18%. The mortgage note is to be assumed by the partnership together with any unpaid interest incurred on the note. How much will be Carlo’s initial capital on the partnership being formed?
In 2021, Fred and Felix pooled their resources to form F&F Partnership. They will both work actively in the business and they have agreed to share profits and losses 50-50. To form this partnership, Fred contributed manufacturing equipment with a FMV of $1,000,000 and a basis of $100,000. Felix contributed $400,000 of cash and land with a fair market value of $800,000 and a basis of $500,000. The equipment contributed by Fred was not encumbered by debt. The land contributed by Felix had a $200,000 mortgage (qualified nonrecourse debt) which was assumed by F&F Partnership. In 2023, when Fred’s outside basis is $180,000, Fred received a proportionate non-liquidating distribution as follows: Adjusted basis Fair Market Value Cash $130,000 $130,000 Inventory 20,000…
6) Oliva Tsang and David Breck began a partnership by investing $5,000 and $45,000 respectively. For the year-ended December 31, 2009, the partnership earned $100,000. The partners agree to share income by allowing a $65,000 per year salary allowance to Breck, a $15,000 per year salary allowance to Tsang, 5% interest on beginning capital balances and the remainder equally. a) Prepare calculations that show how the income should be allocated to the partners under the following plans for sharing net incomes and losses.
Velma and Keota (V&K) is a partnership that owns a small company. It is considering two alternative investment opportunities. The first investment opportunity will have a five-year useful life, will cost $15,169.64, and will generate expected cash inflows of $3,900 per year. The second investment is expected to have a useful life of four years, will cost $10,073.45, and will generate expected cash inflows of $3,600 per year. Assume that V&K has the funds available to accept only one of the opportunities. (PV of $1 and PVA of $1) (Use appropriate factor(s) from the tables provided.) Required a. Calculate the internal rate of return of each investment opportunity. (Do not round intermediate calculations.) b. Based on the internal rates of return, which opportunity should V&K select? Internal Rate of Return % a. First investment % Second investment b. V&K should select the second investment
A Lululime fashion business partnership has agreed that half of the annual profit be distributed in proportion to each partner's investment in the partnership, and that the other half be distributed in proportion to the total number of hours that each partner worked in the business during the year. In 2020 the profit of the company was $82,780. How the company should allocated this profit to its three investors if the amounts invested by Howe, Denver, and Laura are $68,000, $27,000, and $43,000, and their hours of work for the year were 420, 1170, and 1230, respectively?
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Tom and Rick plan to form T & S Investments, a general partnership, to remodel and operate a small shopping mall in a building that is owned by Rick. They have agreed that Tom will contribute $50,000 cash for a 50% interest. For the other 50% interest, Rick intends to contribute the building and land, which has a FMV of $180,000 (building $150,000 and land $30,000) and is subject to a fully recourse mortgage liability of $130,000 incurred to purchase the building. Rick's depreciated basis in the building is $46,400 and accumulated depreciation prior to the building's contribution is $63,600. The building and land were purchased on June 5, 1995 for $123,600 (building $110,000 and land $13,600). Will Rick's contribution of property subject to a liability exceeding the basis of the property qualify for non-recognition treatment? What is the partnership's basis in the property? What is Rick's basis in his partnership interest? What is Tom's basis in his partnership interest?
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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