Sable Kurt and Todd White are forming a partnership to develop a theme park near Bay City, Florida. Kurt contributes cash of $4,000,000 and land with a current market value of $13,500,000 When Kurt purchased the land in 2013, its cost was $7,500,000. The partnership will assume Kurt's $4,750,000 note payable on the land. White contributes cash of $6,000,000 and equipment with a current market value of $7,500,000 Requirements 1. Journalize the partnership's receipt of assets and liabilities from Kurt and from White 2. Compute the partnership's total assets, total liabilities, and total partners' equity immediately after organizing Requirement 1. Journalize the partnership's receipt of assets and liabilities from Kurt and from White (Record debits first, then credits. Select the explanation on the last line of the journal entry table

Sable Kurt and Todd White are forming a partnership to develop a theme park near Bay City, Florida. Kurt contributes cash of $4,000,000 and land with a current market value of $13,500,000 When Kurt purchased the land in 2013, its cost was $7,500,000. The partnership will assume Kurt's $4,750,000 note payable on the land. White contributes cash of $6,000,000 and equipment with a current market value of $7,500,000 Requirements 1. Journalize the partnership's receipt of assets and liabilities from Kurt and from White 2. Compute the partnership's total assets, total liabilities, and total partners' equity immediately after organizing Requirement 1. Journalize the partnership's receipt of assets and liabilities from Kurt and from White (Record debits first, then credits. Select the explanation on the last line of the journal entry table

SWFT Corp Partner Estates Trusts

42nd Edition

ISBN:9780357161548

Author:Raabe

Publisher:Raabe

Chapter10: Partnerships: Formation, Operation, And Basis

Section: Chapter Questions

Problem 37P

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Kia and Jimmy are forming a partnership to develop a water park. Kiacontributes cash of $300,000 and land with the current value of $10,500,000.The partnership will assume Notes payable of $350,000 on the land. Jimmycontributes cash of $5,000,000 and equipment of market value $5,500,000.Journal the transactions and prepare a Balance Sheet as on date ofIncorporation.
Billy Bob and Junior want to develop a water park in Colorado. On Sept 20, 2021 Billy Bob contributes $2,000,000 cash and land with a current market value of $7,500,000. When Billy Bob purchased the land it cost $5,500,000. The partnership will also take over a Billy Bob's $3,000,000 note payable on the land. Junior contributes $2,000,000 cash and equipment with a current market value of $4,000,000. a) Journalize the partnership's receipt of assets and liabilities from Billy Bob and Junior. b) Compute the partnership's total assets, total liabilities, and equity immediately after organizing. Use cell references.
Pedernal, Pating, and Liggayu are forming a new partnership. Pedernal is to invest cash of P100,000 and stapling equipment originally costing P120,000 but has a second-hand market value of P50,000. Pating is to invest cash of P160,000. Liggayu, whose family is engaged in selling stapling equipment, is to contribute cash of P50,000 and a brand new stapling equipment to be used by the partnership with a regular price of P120,000 but which cost their family's business P100,000. The partners agreed to share profits equally. The capital balances upon formation are:
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?
Andy and Amy agree to form a partnership with Andy investing the following: Land (with mortgage note) Cost - P1,500,000 Market Value - P3,500,000 Building Cost - P5,000,000 Market Value - P2,500,000 Accumulated Depreciation Cost - P1,500,000 Amy will invest cash equal to half of Andy's investment. There is a PNB note of P1, 200, 000 which will be assumed by the partnership. Give two journal entries to record the investments of the partner.
In the E&M Partnership, Edward invests USD120,000 in cash, and inventory with a cost of USD120,000 and a current value of USD105,000. Furthermore, Edward invests in land that costs USD175,000 but has a current market value of USD220,000. The partnership agrees to take on the property's USD140,000 mortgage. On the other hand, Mary invests in equipment with a USD200,000 cost and a USD140,000 accumulated depreciation. Mary's equipment is currently worth USD190,000. She also invests in inventory with a cost of $50,000 and a current value of $52,000. Compute and determine hoe much Mary must invest so that the two partners' capital accounts have equal balances?
Mitt Romney contributed land, equipment, and $60,000 in cash to form a partnership with his buddy Barack Obama. The land had a book value of $40,000 and a market value of $68,000. The equipment had a book value of $30,000 and a market value of $35,000. The partnership also assumed a $10,000 note payable owed by Mitt that was associated with Mitt's business. Show the journal entry that thepartnership would make for Mitt's contribution to the partnership.
Ranran, Sansan, and Tantan are forming a new partnership. The following are their contributions: • Ranran is to invest cash of P100,000 and stapling equipment originally costing P120,000 but has a second-had market value of P50,000. • Sansan is to invest cash of P 160,000. • Tantan, whose family is engaged in selling stapling equipment, is to contribute cash of P50,000, and a brand-new stapling equipment to be used by the partnership with a regular price of P 120,000 but which cost their family's busmess P100,000. • The partners agreed to share profits and loss equally.The capital balances upon formation are: a) Ranran - ₱220,000; Sansan - ₱160,000; Tantan - ₱220,000 b) Ranran - ₱150,000; Sansan - ₱160,000; Tantan - ₱170,000 c) Ranran - ₱150,000; Sansan - ₱160,000; Tantan - ₱220,000 d) Ranran - ₱176,666; Sansan - ₱176,666; Tantan - ₱176,668
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…
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. During 2021, F&F Partnership had non-separately stated loss (ordinary operating loss) of $(80,000), a long-term capital gain of $20,000. In 2021, they refinanced the $200,000 mortgage and now have a total of $250,000 of qualified non-recourse debt. 1. What items of income will Fred report on his 1040 return? What is Fred’s outside basis in his partnership interest at the end of 2021? 2. What items of…
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 2022, F&F Partnership sold the land (originally contributed by Felix) for $900,000. Determine the amount of gain to be allocated to Fred and to Felix.
Mansoor, Salim and Haitham are forming a partnership. Mansoor is transferring $150,000 of personal cash to the partnership. Salim owns land worth $55,000 and a small building worth $80,000 with market value $75,000, which he transfers to the partnership. Haitham transfers to the partnership cash of $9,000, Accounts receivable of $32,000 and equipment worth $19,000. The partnership expects to collect $27,000 of the accounts receivable. Instructions (a) Prepare the journal entries to record each of the partners’ investments.(b) What amount would be reported as total owners’ equity immediately after the investments?