Answered: The capital contribution of Gian should…

Business

Accounting

The capital contribution of Gian should be

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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JOhn and Mack are partners in a business. John's original capital was $39,700 and Mack's was $50,100. They agree to salaries of $11,300 and $18,600 for John and Mack, respectively, and 10% interest on original capital. If they agree to share the remaining profits and losses in a 3:2 ratio, what will John'a share of the income be if the income for the year is $74,100?
María and Bob form Robin Corporation. María transfers property worth $420,000 with a basis of $150,000 for 70 shares in Robin Corporation. Bob receives 30 shares for property worth $165,000 with a basis of $30,000 and legal services worth $15,000 in organizing the corporation. If there is no gain or loss, enter "0" for the amount. a. What gain or income, if any, will the parties recognize on the transfer? María recognizes no gain or loss Feedback of $ Bob recognizes ordinary income of $ Check My Work Section 351 is mandatory if a transaction satisfies the provision's requirements. The three requirements for nonrecognition of gain or loss under § 351 are that (1) property is transferred (2) in exchange for stock and (3) the property transferors are in control of the corporation after the exchange. b. What basis do María and Bob have in the Robin Corporation stock? María has a basis of $ Feedback Check My Work Incorrect , and Bob has a basis of $ 420,000 X in the stock. c. What is Robin…
Marie and Ramesh form Roundtree Corporation with the transfer of the following. Marie performs personal services for the corporation with a fair market value of $190,800 in exchange for 400 shares of stock. Ramesh contributes an installment note receivable (basis $25,000; fair market value $30,000), land (basis $50,000; fair market value $170,000), and inventory (basis $450,560; fair market value $563,200) in exchange for 1,600 shares. Determine Marie and Ramesh's current income, gain, or loss and calculate the basis that each takes in the Roundtree stock. If an amount is zero, enter "0". Marie has income of $ of stock. Ramesh has income of $ and $ and $ basis in her 400 shares basis in his 1,600 shares of stock.
On February 1, 2023, Tessa Williams and Audrey Xie formed a partnership in Ontario. Williams contributed $85,000 cash and Xie contributed land valued at $125,000 and a small building valued at $185,000. Also, the partnership assumed responsibility for Xie's $135,000 long-term note payable associated with the land and building. The partners agreed to share profit or loss as follows: Williams is to receive an annual salary allowance of $95,000, both are to receive an annual interest allowance of 15% of their original capital investments, and any remaining profit or loss is to be shared equally. On November 20, 2023, Williams withdrew cash of $65,000 and Xie withdrew $50,000. After the adjusting entries and the closing entries to the revenue and expense accounts, the Income Summary account had a credit balance of $165,000. Required: 1. Present general journal entries to record the initial capital investments of the partners, their cash withdrawals, and the December 31 closing of the…
Suzy contributed assets valued at $360,000 (basis of $200,000) in exchange for her 40% interest in Suz-Anna GP (a general partnership in which both partners are active owners). Anna contributed land and a building valued at $640,000 (basis of $380,000) in exchange for the remaining 60% interest. Anna’s property was encumbered by qualified nonrecourse financing of $100,000, which was assumed by the partnership. The partnership reports the following income and expenses for the current tax year. What is the beginning and ending nonrecourse values. Beg $0 ending $40,000 What is the beginning Capital amount ? Sales $560,000 Utilities, salaries, depreciation, other operating expenses 360,000 Short-term capital gain 10,000 Tax-exempt interest income 4,000 Charitable contributions (cash) 8,000 Distribution to Suzy 10,000 Distribution to Anna 20,000 At the end of the year, Suz-Anna held recourse debt of $100,000 for partnership accounts payable…
Brett and Illain formed a new Corporation by transferring the following assets in exchange for stock:▪ Brett transferred: Property subject to a 70,000 mortgage; FMV $1,000000, Basis 500,000. In exchange, she received 200 shares of Stock and relief of the mortgage liability. ▪ Illain transferred: Inventory with a Basis of 15,000 and FMV 150,000. Required:a. What is Brett’s basis in the stock she received b. What is Brett’s recognized gain/loss
D, E and F formed a joint operation. They agreed on the following: F is the appointed as the manager. As compensation, F is entitled to a ₱120 salary plus bonus of 25% of profit after deducting the salary and the bonus. However, F will be charged for the cost of any unsold inventory. Interest of 10% per annum is allowed to D’s and E’s capital contributions. Any remaining profit or loss is divided equally. The joint operation was complete after a year. The following were the transactions: D contributed cash of ₱400 and merchandise costing ₱ 800. E contributed merchandise costing ₱1,600. E paid freight of ₱80 in the transfer. F purchased merchandise worth ₱400 using D’s cash contribution. F paid expenses of ₱800 using his own cash. F made total sales of ₱3,200. All inventories were sold except one-half of those contributed by E. How much is the joint operation’s profit after deduction for salary but before deduction for bonus? ______________________ 2. On the cash…
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Singer and McMann are partners in a business. Singer's original capital was $37,800 and McMann's was $54,600. They agree to salaries of $10,700 and $18,800 for Singer and McMann, respectively, and 10% interest on original capital. If they agree to share the remaining profits and losses in a 3:2 ratio, what will Singer's share of the income be if the income for the year is $58,500? a.$14,480 b.$35,100 c.$26,336 d.$10,700
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Kim received a 1/3 profits and capital interest in Bright Line, LLC in exchange for legal services she provided. In addition to her share of partnership profits or losses, she receives a $22,000 guaranteed payment each year for ongoing services she provides to the LLC. For X4, Bright Line reported the following revenues and expenses: Sales - $142,000, Cost of Goods Sold - $82,000, Depreciation Expense - $41,000, Long-Term Capital Gains - $7,000, Qualified Dividends - $5,200, and Municipal Bond Interest - $3,200. How much ordinary business income (loss) will Bright Line allocate to Kim on her Schedule K-1 for X4? Multiple Choice ($3,000). $10,600. $13,800. $19,000. None of the choices will be reported as ordinary business income (loss) on Schedule K-1.