Car and Lam establish an equal partnership in both equity and profits to operate a used-furniture business under the name “C&L Furniture.” Car contributes furniture inventory, which costs $120,000 and has fair value of $160,000. Lam contributes $60,000 cash and delivery equipment, which costs $80,000 and has a fair value of $60,000. Compute the ending balance of Car’s Capital account under the bonus approach Compute the ending balance of Lam’s Capital account under the bonus approach Compute the ending balance of Car’s Capital account under the goodwill approach 4. Compute the ending balance of Lam’s Capital account under the goodwill approach

Car and Lam establish an equal partnership in both equity and profits to operate a used-furniture business under the name “C&L Furniture.” Car contributes furniture inventory, which costs $120,000 and has fair value of $160,000. Lam contributes $60,000 cash and delivery equipment, which costs $80,000 and has a fair value of $60,000. Compute the ending balance of Car’s Capital account under the bonus approach Compute the ending balance of Lam’s Capital account under the bonus approach Compute the ending balance of Car’s Capital account under the goodwill approach 4. Compute the ending balance of Lam’s Capital account under the goodwill approach

SWFT Corp Partner Estates Trusts

42nd Edition

ISBN:9780357161548

Author:Raabe

Publisher:Raabe

Chapter10: Partnerships: Formation, Operation, And Basis

Section: Chapter Questions

Problem 61P

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Jane and Kathy are joining their separate business to form a partnership. Cash and non-cash assets are to be contributed for a total capital of P300,000. The non-cash assets are to be contributed and liabilities to be assumed are as follows: Jane Kathy Book Value Fair Value Book Value Fair Value Receivable Inventories Equipment Payable P 22,500 22,500 37,500 11,250 P 22,500 33,750 30,000 11,250 P 60,000 67,500 7,500 P67,500 71,250 7,500 The partner's capital accounts are to be equal after all contributions of assets and assumptions of liabilities. Determine the total assets of the partnership.
The partnership agreement of the G&P general partnership states that Gary will receive a guaranteed payment of $13,000, and that Gary and Prudence will share the remaining profits or losses in a 45/55 ratio. For year 1, the G&P partnership reports the following results: Sales revenue Gain on sale of land (§1231) Cost of goods sold Depreciation-MACRS Employee wages Cash charitable contributions Municipal bond interest Other expenses $ 70,000 $ 8,000 $ (38,000) $ (9,000) $ (14,000) $ (3,000) $ 2,000 $ (2,000) (Negative amounts should be indicated by a minus sign.) b. Compute Gary's share of self-employment income (loss) to be reported on his year 1 Schedule K-1, assuming G&P is a limited partnership and Gary is a limited partner. Self-employment income (loss)
Bob is investing in a partnership with Jerry. Bob contributes equipment that originally cost P63,000, has a book value of P30,000, and a fair market value of P39.000. The entry that the partnership makes to record Bob's initial contribution includes a * O debit to Equipment for P33,000. debit to Equipment for P63,000. debit to Equipment for P39,000 credit to Accumulated Depreciation for P33,000.
Bert, Ben, and Bello are partners in a sports equipment store with capital investments of P150,000, P200,000, and P300,000, respectively. The partnership agreement provides for the following salary of P10,000 to Ben who is the managing partner, 12% interest on capital contributions, remaining profit to be allocated equally. Direction: For Ben to be credited for a profit share of P200,000, how much should the company earn?
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The partnership agreement of the G&P general partnership states that Gary will receive a guaranteed payment of $14,100, and that Gary and Prudence will share the remaining profits or losses in a 45/55 ratio. For year 1, the G&P partnership reports the following results: Sales revenue Gain on sale of land (§1231) Cost of goods sold Depreciation-MACRS Employee wages Cash charitable contributions Municipal bond interest Other expenses $ 91,500 7,500 (53,500) (15,600) (11,100) (5,300) 5,450 (5,100) Note: Negative amounts should be indicated by a minus sign. Required: a-1. How much ordinary income (loss) is allocated to Gary for the year? a-2. Compute Gary's share of separately stated items to be reported on his year 1 Schedule K-1, including his self-employment income (loss). Complete this question by entering your answers in the tabs below. Required A1 Required A2 How much ordinary income (loss) is allocated to Gary for the year? Note: Round your intermediate computations to the nearest…
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