Answer please A partnership in which a parent transferred a 40% interest by gift to a child generated a profit of $202,500. Capital is a material income-producing factor. The parent performed services valued at $60,750. The child performed no services.How much income is allocated to the parent for services and for use of capital?Compensation for services: $60,750Use of capital: $In addition,X of income is allocated to the child.

To solve this problem, we need to apply the partnership income allocation rules based on the given…

Answered: A partnership in which a parent…

SWFT Corp Partner Estates Trusts

42nd Edition

ISBN:9780357161548

Author:Raabe

Publisher:Raabe

Chapter11: Partnerships: Distributions, Transfer Of Interests, And Terminations

Section: Chapter Questions

Problem 24CE

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Required: 3. Prepare journal entry to record Pedro’s admission. 4. During the first year of operations, the partnership earned P650,000. After Pedro’s admission, the profitand loss sharing ratio is 40:40:20 for Juan, Pablo, and Pedro, respectively, based on capital credits.Drawings were made in these amounts: Juan, P100,000; Pablo, P130,000; Pedro – P56,000. What isthe capital balance of Pedro after the first year?
Greg and Harriet are partners in GH partnership. Greg originally contributed $50,000 while Harriet contributed $150,000. Greg works full-time while Harriet works part-time. During the year, GH Partnership earned $120,000 in net income. Determine how much of this $120,000 would be allocated to each partner under each of the following profit/loss sharing agreements. a. There is no agreement. Greg Harriet b. In the ratio of original capital investments. Greg Harriet c. In the ratio of time devoted to the business. Greg Harriet d. 10% of original capital investments and the remainder equally. Greg Harriet e. 10% of original capital investments, a salary allowance of $30,000 for Greg, and the remainder equally. Greg Harriet
This year Sheila's income from her partnership is $225.000 Sheila's business deductions from the partnership total $440,000. Sheila also earns $170,000 of W-2 income and has $65,000 of investment income What is the amount of the excess business loss that is carried forward as a NOL? A.$0 B. $150.000 C. $200.000 D. $216.000
Xavier and Yolanda have original investment of $50,000 and $100,000 respectively in a partnership. The articles of partnership include the following provisions regarding income; interest on original investment at 10%, salary allowances of $27,000 at $18,000 I have the remaining income how much of the net loss of $6000 alligator to Yolanda?
Solange and Louis enter into a partnership agreement. Solange contributes $65,000 in capital. Louis contributes $95,000 in capital. The agreement stipulates that profits and losses will be shared in the ratio of their respective capital account balances. The net income for the year is $32,000. Which of the following amounts should be credited to Louis’s capital account? $19,000 $32,000 $16,000 $13,000
Winnie and Minnie form a partnership. Winnie contributed $5,000 cash and $20,000 in inventory. Minnie contributes $8,000 in cash and land with a current market value of $60,000. The land originally cost $30,000. Minnie also brings over a $20,000 liability to the partnership. Which of the following is correct? Select one: O a. Minnie, capital is credited for 68,000 b. Winnie, capital is debited for 25,000 c. Minnie, capital is credited for 48,000 O d. Winnie, capital is credited for $5,000
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.
James joined a partnership by contributing the following: cash, P20,000;accounts receivable, P4,000; land, P240,000 fair value; and accounts payable, P16,000. What will be the initial amount recorded in James’ capital account? Give the entry to record the investment of James
Rosy, Roland and Robert were partners with capital balances as at year end of P250,000; P350,000; P400,000, respectively. The partner's agreement stated that profit sharing will be based on year-end capital balances. If the net income for the year before 30% income tax amounted P280,000, how much will be the profit share of Roland ?
Xavier and Yolanda have original investments of $50,000 and $100,000, respectively, in a partnership. The articles of partnership include the following provisions regarding the division of net income: interest on original investment at 10%; salary allowances of $27,000 and $18,000, respectively; and the remaining income (loss) equally. How much of the net loss of $(6,000) is allocated to Yolanda?
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 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? $91,500 7,500 (53,500) (15,600) (11,100) (5,300) 5,450 (5,100) 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). How much ordinary income (loss) is allocated to Gary for the year? Note: Round your intermediate computations to the nearest whole dollar amount. Ordinary income (loss) Description Required At Separately Stated Items…
Paul and Wayne equally own PW Partnership. Paul's basis was $30,000 and Wayne's basis was $22,000 at the beginning of the year. PW Partnership had the following income and expense items: Sales $ 330,000 Cost of goods sold 220,000 Guaranteed payment to Paul 40,000 Rent expense 24,000 Depreciation 33,000 Interest expense 4,000 Tax-exempt income 3,000 Health insurance premiums for Paul 3,600 Health insurance premiums for Wayne 3,600 PW Partnership's non-financial information is as follows: Name: PW Partnership Address: 5 Furniture Street, Anywhere, NC 28777 EIN: 56-1234567 Date Partnership Began: 01/01/10 Business Code: 442110 Principal Business Activity: Retail Principal Product or Service: Furniture Follows the Cash Method of Accounting Chapter 14, TRP 14-1 Part c c. Calculate Wayne’s basis in his partnership interest.

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