South-western Federal Taxation 2018: Individual Income Taxes
41st Edition
ISBN: 9781337385886
Author: William H. Hoffman, James C. Young, William A. Raabe, David M. Maloney, Annette Nellen
Publisher: Cengage Learning
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Chapter 20, Problem 5CPA
To determine
Calculate the basis of Person B’s interest in
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Blossom, Bubbles and Buttercup formed a partnership to which Blossom contributed a parcel of land with an acquisition cost of P 25,000. Bubbles contributed P50,000 cash and Buttercup P 75,000 cash. The land has a fair value of P 50,000 at the formation date. The total capital credit of the partnership should be *
a. P 150,000
b. P 125,000
c. P 175,000
d. P 145,000
On January 2 of the current year, Black acquired a 50% interest in New Partnership by contributing property with an adjusted basis of $7,000 and a fair market value of $9,000, subject to a mortgage of $3,000. What was Black's basis in New at January 2 of the current year?
a.
$3,500
b.
$4,000
c.
$5,500
d.
$7,500
Craig Roberts purchased one-half of Ennis Leighton's interest in the Vale and Leighton
partnership for $34,000. Prior to the investment, land was revalued to a market value of
$130,000 from a book value of $80,000. Tony Vale and Ennis Leighton share net income
equally. Leighton had a capital balance of $36,000 prior to these transactions.
b. Provide the journal entry to admit Roberts.
Chapter 20 Solutions
South-western Federal Taxation 2018: Individual Income Taxes
Ch. 20 - Prob. 1DQCh. 20 - LO.1 Sylvia and Trang want to enter into business...Ch. 20 - Prob. 3DQCh. 20 - Prob. 4DQCh. 20 - Prob. 5DQCh. 20 - Prob. 6DQCh. 20 - LO.3, 4, 5 Contrast the income taxation of...Ch. 20 - LO.3, 8, 9 The taxpayer has generated excess...Ch. 20 - Prob. 9DQCh. 20 - Prob. 10DQ
Ch. 20 - Prob. 11DQCh. 20 - Prob. 12DQCh. 20 - Prob. 13DQCh. 20 - Prob. 14DQCh. 20 - Prob. 15DQCh. 20 - Prob. 16DQCh. 20 - Prob. 17DQCh. 20 - Prob. 18DQCh. 20 - Prob. 19DQCh. 20 - Prob. 20DQCh. 20 - Prob. 21DQCh. 20 - Prob. 22DQCh. 20 - Prob. 23DQCh. 20 - Blaine, Cassie, and Kirstin are equal partners in...Ch. 20 - Prob. 25DQCh. 20 - LO.3 Green Corporation, a calendar year taxpayer,...Ch. 20 - Prob. 27CECh. 20 - Banana Corporation is a May 31 fiscal year...Ch. 20 - LO.4 Gold and Silver are two unrelated calendar...Ch. 20 - Maroon Corporation is a calendar year taxpayer....Ch. 20 - Prob. 32CECh. 20 - Prob. 33CECh. 20 - Prob. 34CECh. 20 - Drab Corporation, a calendar year S corporation,...Ch. 20 - Kim is a 40% shareholder in Taupe Corporation, a...Ch. 20 - Prob. 37CECh. 20 - LO.3, 4, 5 Using the legend provided below,...Ch. 20 - LO.3 Garnet has the following capital asset...Ch. 20 - LO.3, 8 Citron, a calendar year taxpayer, began...Ch. 20 - LO.3 Taupe, a calendar year taxpayer, has a...Ch. 20 - LO.3, 8 Robin had the following capital...Ch. 20 - Prob. 43PCh. 20 - Prob. 44PCh. 20 - Prob. 45PCh. 20 - Prob. 46PCh. 20 - Prob. 47PCh. 20 - Prob. 48PCh. 20 - Prob. 49PCh. 20 - Prob. 50PCh. 20 - Prob. 51PCh. 20 - Prob. 52PCh. 20 - Prob. 53PCh. 20 - Prob. 54PCh. 20 - During the current year, Thrasher (a calendar...Ch. 20 - Prob. 56PCh. 20 - Jim Olsen owns all of the stock in Drake, a...Ch. 20 - Prob. 58PCh. 20 - Prob. 59PCh. 20 - LO.9 The Pheasant Partnership reported the...Ch. 20 - Prob. 61PCh. 20 - Prob. 62PCh. 20 - Prob. 63PCh. 20 - Prob. 1RPCh. 20 - Prob. 2RPCh. 20 - Prob. 3RPCh. 20 - Prob. 5RPCh. 20 - On January 1, year 5, Olinto Corp., an accrual...Ch. 20 - Prob. 2CPACh. 20 - Prob. 3CPACh. 20 - Prob. 4CPACh. 20 - Prob. 5CPACh. 20 - Prob. 6CPACh. 20 - Prob. 7CPA
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- Blake and Ryan form the Poole Partnership. Blake contributes cash of $15,000. Ryan contributes land with an adjusted basis of $10,000 and a fair market value of $21,000. The land is subject to a $6,000 mortgage that Poole assumes. Blake and Ryan both receive a 50 percent interest in Poole. What is Ryan's recognized gain or loss on the contribution? a.$11,000 loss b.$5,000 gain c.$16,000 gain d.$4,000 loss e.None of these choices are correct.arrow_forwardCraig Roberts purchased one-half of Ennis Leighton’s interest in the Vale and Leighton partnership for $34,000. Prior to the investment, land was revalued to a market value of $130,000 from a book value of $80,000. Tony Vale and Ennis Leighton share net income equally. Leighton had a capital balance of $36,000 prior to these transactions.a. Provide the journal entry for the revaluation of land.b. Provide the journal entry to admit Roberts.arrow_forward4. Roberts and Smith drafted a partnership agreement that lists the following assets contributed at the partnership's formation: Contributed by Roberts Smith $20,000 $30,000 15,000 40,000 Cash Inventory Building Furniture & Equipment 15,000 The building is subject to a mortgage of $10,000, which the partnership has assumed. The partnership agreement also specifies that profits and losses are to be distributed evenly. What amounts should be recorded as capital for Roberts and Smith at the formation of the partnership? Roberts Smith $35,000 $85,000 $35,000 $75,000 $55,000 $55,000 $60,000 $60,000 а. b. с. d.arrow_forward
- Jones and Smith formed a partnership with each partner contributing the following items: Jones Smith Cash... P 80,000 P 40,000 Building - Cost to Jones.. 300,000 Fair value.... 400,000 Inventory - Cost Smith.. 200,000 Fair value.... 280,000 Mortgage Payable. . 120,000 Account Payable. . 60,000 Assume that for tax purposes Jones and Smith agree to share smually in the liabilities assumed by the Jones and Smith partnership. What is the balance in Smith's capital account for financial accountingarrow_forwardOn January 2 of the current year, Black acquired a 50% interest in New Partnership by contributing property with an adjusted basis of $7,000 and a fair market value of $9,000, subject to a mortgage of $3,000. What was Black's basis in New Partnership at January 2 of the current year? a. $3,500 b. $4,000 c. $5,500 d. $7,500arrow_forwardCraig Roberts purchased one-half of Ennis Leighton's interest in the Vale and Leighton partnership for $34,000. Prior to the investment, land was revalued to a market value of $130,000 from a book value of $80,000. Tony Vale and Ennis Leighton share net income equally. Leighton had a capital balance of $36,000 prior to these transactions. a. Provide the journal entry for the revaluation of land.arrow_forward
- A & B formed a partnership. A contributed cash and land with a fair value of P60,000 and a book value of P50,000. B contributed P130,000 cash for 65% claim in the partnership's assets. Compute the amount of cash A should contribute.arrow_forward8. Dunn and Grey are partners with capital account balances of $60,000 and $90,000, respectively. They agree to admit Zorn as a partner with a one-third interest in capital and profits, for an investment of $100,000, after revaluing the assets of Dunn and Grey. Goodwill to the original partners should be a. $0 b. $33,333 c. $50,000 d. $66,667arrow_forwardImmediately prior to the admission of Abbott, the Smith-Jones Partnership assets had been adjusted to current market prices and the capital balances of Smith and Jones were $54,800 and $59,300, respectively. If the parties agree that the business is worth $152,100, what is the amount of bonus that should be recognized in the accounts at the admission of Abbott? a.$38,000 b.$97,300 c.$92,800 d.$19,000arrow_forward
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