Tony, Mary, and Tegan are partners with capital balances of $200,000, $120,000, and $120,000, respectively. Profits and losses are shared in a 3:1:1 ratio. Tegan decided to withdraw and the partnership revalued its assets. The value of inventory was decreased by $40,000 and the value of land was increased by $80,000. Tony and Mary then agreed to pay Tegan $180,000 for her withdrawal from the partnership. Required: Prepare a schedule to identify capital account balances of Tony and Mary after Tegan's withdrawal under the: A. B. bonus method. goodwill method. 3

Tony, Mary, and Tegan are partners with capital balances of $200,000, $120,000, and $120,000, respectively. Profits and losses are shared in a 3:1:1 ratio. Tegan decided to withdraw and the partnership revalued its assets. The value of inventory was decreased by $40,000 and the value of land was increased by $80,000. Tony and Mary then agreed to pay Tegan $180,000 for her withdrawal from the partnership. Required: Prepare a schedule to identify capital account balances of Tony and Mary after Tegan's withdrawal under the: A. B. bonus method. goodwill method. 3

SWFT Corp Partner Estates Trusts

42nd Edition

ISBN:9780357161548

Author:Raabe

Publisher:Raabe

Chapter10: Partnerships: Formation, Operation, And Basis

Section: Chapter Questions

Problem 59P

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28. On February 14, AA and BB formed a partnership and contributed the following assets at historical costs: AA BB Cash P600,000 P200,000 Inventories ? ? Furniture and fixtures 40,000 Delivery equipment 80,000 Land 300,000 The land was subject to a mortgage which has an unpaid balance of P50,000. The mortgage will be assumed by the partnership. AA and BB agreed to share profits and losses in the ratio of 1:2, respectively. The partners agreed to contribute inventories (BB is to contribute inventories worth 2.5 times the peso value of the inventories to be contributed by AA) in order to have their capital credits in the same ratio as their profits and losses ratio. How much is the capital account of BB upon formation of the partnership?
4. 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.
Alpha and Beta are partners who share income in the ratio of 1:2 and have capital balances of $41,700 and $79,200, respectively, at the time they decide to terminate the partnership. Noncash assets with a book value of $120,900 are sold for $75,000. What amount of loss on realization should be allocated to Alpha? a.$75,000 b.$41,700 c.$25,000 d.$15,300
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Problem 1: On January 1, 20x1, Rody and Noy formed a partnership. Rody and Noy contributed the following assets at formation: Rody Noy Cash 25,000 37,500 Inventory 18,750 Building 50,000 Equipment 18,750 The building is subject to a P12,500 mortgage, which was assumed by the partnership. They share profit and loss in the ratio of 60:40. Assuming Rody will invest (withdraw) cash so that his capital balance will equal to his profit and loss ratio, what is the total asset of the partnership after formation? (The correct answer is 246,875 but I need a solution/explanation)
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Hewitt and Patel are partners, sharing gains and losses equally. They decide to terminate their partnership. Prior to realization, their capital balances are $28,000 and $18,000, respectively. After all noncash assets are sold and all liabilities are paid, there is a cash balance of $35,000.a. What is the amount of a gain or loss on realization?b. How should the gain or loss be divided between Hewitt and Patel?c. How should the cash be divided between Hewitt and Patel?
1. Robin,Cardinal, Jay are partners sharing profits and losses 30/30/40 respectively. Their capital balances are: Robin $175,000 Cardinal $300,000 Jay $275,000 total $750,000 The old and partners agree that the assets are undervalued by $100,000. a. Record the adjustment to the books before the new partner is admitted. b. Assume sparrow invests in the partnership $250,000 and partners agree thereafter to share profits and losses equally. Record the entry of Sparrow using the bonus method whereby Sparrow receives 20% interest in the firm. c. Assume, instead Sparrow puts into the partnership $350,000 of cash and is awarded a 50% interest. Record the entry of sparrow using the goodwill method. d. In the first year after Sparrow's entrance under the conditions outlined in part "c" above, an agreement was made amending the sharing of profits and losses, whereby Jay gets a salary of $40,000, and each partner receives 10% interest on their beginning capital balances with the remainder shared…