Advanced Financial Accounting
12th Edition
ISBN: 9781259916977
Author: Christensen, Theodore E., COTTRELL, David M., Budd, Cassy
Publisher: Mcgraw-hill Education,
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Textbook Question
Chapter 15, Problem 15.19AP
Initial investments and Tax Bases [AICPA Adapted]
The DELS partnership was formed by combining individual accounting practices on May 10, 20X1. The initial investments were as follows:
![Chapter 15, Problem 15.19AP, Initial investments and Tax Bases [AICPA Adapted] The DELS partnership was formed by combining](http://dev-ingestion-image-output.s3-website-us-east-1.amazonaws.com/9781259916977/Chapter-15/images/html_16977-15-15.19ap_image001.jpg)
Required
- Prepare the
journal entry to record the initial investments using GAAP accounting. - Calculate the tax basis of each partner’s capital if Delaney, Engstrom, Lahey and Simon agree to assume equal amounts for the payables.
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Required information Skip to question [The following information applies to the questions displayed
below.] Ramer and Knox began a partnership by investing $58,000 and $87,000, respectively. During its
first year, the partnership earned $180,000. Prepare calculations showing how the $180,000 income is
allocated under each separate plan for sharing income and loss. 2. The partners agreed to share income
and loss in proportion to their initial investments. Net income is $180,000. Note: Do not round
intermediate calculations.
Pass necessary rectifying journal entries for the following omissions committed while preparing Profit and Loss Appropriation Account. You are also required to show your workings clearly.
(i) A, B and C were partners sharing profits and losses equally. Their fixed capitals were A Rs. 4,00,000; B Rs. 5,00,000 and C Rs. 6,00,000. The partnership deed provided that interest on partners’ capital will be allowed @ 10% per annum. The same was omitted.
(ii) P, Q and R were partners in a firm sharing profits and losses in the ratio of 2 : 2 : 1. Their partnership deed provided that interest on partners’ drawings will be charged @ 18% p.a. Interest on the partners’ drawings was Rs. 1,000, Rs. 500 and Rs. 2,000 respectively. The same was omitted.
Required information
[The following information applies to the questions displayed below.]
Ramer and Knox began a partnership by investing $60,000 and $90,000, respectively. During its first year, the partnership
earned $160,000. Prepare calculations showing how the $160,000 income is allocated under each separate plan for
sharing income and loss.
2. The partners agreed to share income and loss in proportion to their initial investments. Net income is $160,000.
Note: Do not round intermediate calculations.
Fraction to Allocate
Ramer
Ramer's Share Fraction to Allocate Knox's Share of Total Income
of Income
Knox
Income
Allocated
$125,000 / $50,000
$125,000/ $75,000
$50,000/ $125,000
$50,000/ $75,000
$
0
Chapter 15 Solutions
Advanced Financial Accounting
Ch. 15 - Prob. 15.1QCh. 15 - Prob. 15.2QCh. 15 - Prob. 15.3QCh. 15 - Prob. 15.4QCh. 15 - Under what circumstances would a partner’s capital...Ch. 15 - Prob. 15.6QCh. 15 - Prob. 15.7QCh. 15 - Prob. 15.8QCh. 15 - Prob. 15.9QCh. 15 - Prob. 15.10Q
Ch. 15 - Prob. 15.11QCh. 15 - Prob. 15.12QCh. 15 - Prob. 15.13QCh. 15 - Prob. 15.14QCh. 15 - Prob. 15.15AQCh. 15 - Prob. 15.16BQCh. 15 - Prob. 15.1CCh. 15 - Prob. 15.2CCh. 15 - Prob. 15.3CCh. 15 - Prob. 15.1.1ECh. 15 - Prob. 15.1.2ECh. 15 - Prob. 15.1.3ECh. 15 - Prob. 15.1.4ECh. 15 - Multiple-Choice on Initial Investment [AICPA...Ch. 15 - Prob. 15.2ECh. 15 - Prob. 15.3ECh. 15 - Prob. 15.4ECh. 15 - Prob. 15.5ECh. 15 - Prob. 15.6ECh. 15 - Prob. 15.7ECh. 15 - Prob. 15.8.1ECh. 15 - Prob. 15.8.2ECh. 15 - Prob. 15.8.3ECh. 15 - Prob. 15.8.4ECh. 15 - Prob. 15.8.5ECh. 15 - Prob. 15.8.6ECh. 15 - Prob. 15.8.7ECh. 15 - Prob. 15.8.8ECh. 15 - Prob. 15.9ECh. 15 - Retirement of a Partner On January 1, 20X1, Eddy...Ch. 15 - Prob. 15.11PCh. 15 - Prob. 15.12PCh. 15 - Prob. 15.13PCh. 15 - Prob. 15.14PCh. 15 - Withdrawal of a Partner under Various Alternatives...Ch. 15 - Prob. 15.16.1PCh. 15 - Prob. 15.16.2PCh. 15 - Prob. 15.16.3PCh. 15 - Prob. 15.16.4PCh. 15 - Prob. 15.16.5PCh. 15 - Prob. 15.16.6PCh. 15 - Prob. 15.16.7PCh. 15 - Prob. 15.16.8PCh. 15 - Prob. 15.16.9PCh. 15 - Prob. 15.17PCh. 15 - Prob. 15.18PCh. 15 - Initial investments and Tax Bases [AICPA Adapted]...
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