Tropical Fruit Partnership is a calendar year general partnership with the following current year information: Operating loss Liabilities: $(1,650,000) Note payable, Big Bank 165,000 Note payable, Pineapple (individual) 110,000 On January 1 Coconut bought 60% of Tropical Fruit Partnership for $247,500. How much of the operating loss may Coconut deduct currently? Assume the excess business loss limitation does not apply.
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- The Partnership of Rose and Dailine is being dissolved, and the assets and equities at book value and fair value and profit and loss ratios at January 1, 2021 are as follows:Book Value Fair ValueCash P20,000 P20,000Accounts Receivables – net 100,000 100,000 Inventories 50,000 200,000Plant Assets – net 100,000 120,000P270,000 P440,000Accounts Payable P50,000 P50,000Rose, Capital 120,000Dailine, Capital 100,000P270,000 Rose and Dailine agreed to admit Janyla into the partnership for one-third interest. Janyla invests P95,000 cash and a building to be used in the business with a book value to Janyla for P100,000 and a fair value of P120,000.Compute the capital balance of Dailine after the admission assuming that the assets are revalued and goodwill is recognized.a. P175,000 c. P195,000b. 155,000 D. 205,000Citrus Corporation is a calendar year 5 corporation with the following current year information: Operating loss Liabilities: Notes payable, Big Apple Bank 570,000 Notes payable, Grapefruit (individual) 380,000 On January 1 Grapefruit bought 60% of Citrus Corporation for $855,000. She then loaned Citrus Corporation $380,000 (the amount above under labilities). How much of the operating loss may Grapefruit deduct currently? Assume the excess business loss limitation does not apply. $1.425.000 $(2,280,000) $1,235,000 O 51.520,000 $1083.000Citrus Corporation is a calendar year S corporation with the following current year information: Operating loss Liabilities: Notes payable, Big Apple Bank 60,000 Notes payable, Grapefruit (individual) 40,000 On January 1 Grapefruit bought 60% of Citrus Corporation for $90,000. She then loaned Citrus Corporation $40,000 (the amount above under liabilities). How much of the operating loss may Grapefruit deduct currently? Assume the excess business loss limitation does not apply. O $114,000 $(240,000) O $160,000 O $130,000 $150,000
- Perry, Inc. owns a 90% interest in Brown Corp. During 20X6, Brown sold $100,000 in merchandise to Perry at a 30% gross profit. Ten percent of the goods are unsold by Perry at year end. The noncontrolling interest will receive what gross profit as a result of these sales? a. $0 b. $2,700 c. $3,000 d. $27,000A partnership has gone through liquidation and now reports the following account balances: $ 16,000 3,000 (2,000) (deficit) (5,000) (deficit) Cash Loan from Molina Ashean, capital Molina, capital Pinckney, capital Diaz, capital 13,000 7,000 Profits and losses are allocated on the following basis: Ashman, 30 percent; Molina, 20 percent, Pinckney, 30 percent; and Diaz, 20 percent. Required: Calculate the safe payments that can be made to individual partners. Adjusted balances (safe payments) Molina Pinckney $ 2.400$ 1.600 $ 10,600 $ Ashman Diaz 5,400SCA Partnership has the following account balances before liquidation: Cash P350,000 Liabilities P1,125,000 Noncash assets 7,375,000 Loan from A 50,000 S, Capital (40%) C, Capital (40%) A, Capital (20%) Loan to C 150,000 1,250,000 Receivable from s 20,000 1,900,000 Expenses 2,230,000 1,000,000 Revenues 4,800,000 During June, some noncash assets were sold that resulted to a loss of P46,125. Liquidation expenses of P175,000 were paid and additional expenses armounting to P90,000 were expected to be incurred through the following months of liquidation of the partnership. Liabilities to outsiders amounting to P875,000 were paid. What is the book value of the noncash assets which were sold for C to receive P555,550?
- SCA partnership has the following account balances before liquidation: Cash 70,000 Liabilities 225,000 NCA 1,475,000 Loan to C 30,000 Loan from A 10,000 Receivable from S 4,000 Expenses 446,000 S, Capital (4) 250,000 C, Capital (4) 380,000 A, Capital (2) 200,000 Revenues 960,000 During May, some noncash assets were sold that resulted to a loss of 9,225. Liquidation expenses of 35,000 were paid and additional expenses amounting to 18,000 were expected to be incurred through the following months of liquidating the partnership. Liabilities to outsiders amounting to 175,000 were paid. What is the book value of the noncash assets sold for C to received 111,110?As of July 1, 2020, MM and AA decided to form a partnership. Their balance sheets on this date are: MM AA Cash P 15,000 P 38,000 Accounts Receivable 680,000 255,000 Allowance for doubtful accounts (140,000) (30,000) Merchandise Inventory - 202,000 Machinery and Equipment 150,000 270,000 Total P705,000 P735,000 Accounts Payable 135,000 240,000 MM, capital 570,000 AA, capital - 495,000 Total P705,000 P735,000 The partners agreed that the machinery and equipment of MM is under depreciated by P15,000 and that ofAA by P45,000. Allowances for doubtful accounts is to be set up amounting to P120,000 for MM andP40,000 for AA. The partnership agreement provides for the profit and loss ratio and capital interest of60% to MM and 40% to AA with AA’s capital as base. How much cash must MM invest to bring the partner's capital balances proportionate to their profit and loss ratio?Direction: Analyze the case and give what is asked. On January 2, 20X1, Entity X purchases 75% of the common stock of Entity Y for P250,000. Entity Y has P200,000 and P50,000 common stock and retained earnings, respectively. On December 31, 20X1, Entity X sold equipment to Entity Y for P80,000. The equipment generally costs Entity X P120,000 when purchased four (4) years ago. Moreover, it is depreciated over its life of 10 years using the straight-line method with no residual value. The companies have the following data for years 20X1 and 20X2: Entity X Items 20X1 20X2 Dividends Paid Comprehensive Income from Own Operation Р38,000 147,000 Р60,000 159,000 Entity Y Items 20X1 20X2 Dividends Paid to X P22,500 50,000 P31,500 74,000 Comprehensive Income from Own Operation Required: 1. Prepare the necessary journal and elimination entries that should be made in 20X1 and 20X2 about the sale of equipment. Follow the steps in the handout. 2. Allocate the consolidated comprehensive income for…
- X Company and Y Company formed a joint venture, XY Company, in 20x1 to sell particular merchandise. Cash investments by the venturers X Company (65%) P1,200,000; Y Company (35%) P800,000. The following information is available: Purchases of merchandise on account, P1,500,000; Expenses paid, P100,000; Sales on account (130% of cost), P1,508,000. REQUIRED: 11. What is the net income? 12. Using the equity method, what is the balance of the Investment in Joint Venture account in the books of Y Company on December 31, 20x1? 13. Using the equity method, what is the balance of the Investment in Joint Venture account in the books of X Company on December 31, 20x1?X Company and Y Company formed a joint venture, XY Company, in 20x1 to sell particular merchandise. Cash investments by the venturers X Company (65%) P1,200,000; Y Company (35%) P800,000. The following information is available:Purchases of merchandise on account, P1,500,000; Expenses paid, P100,000; Sales on account (130% of cost), P1,508,000.REQUIRED:11. What is the net income? ___________12. Using the equity method, what is the balance of the Investment in Joint Venture account in the books of Y Company on December 31, 20x1? ____________13. Using the equity method, what is the balance of the Investment in Joint Venture account in the books of X Company on December 31, 20x1? ____________Citrus Corporation is a calendar year S corporation with the following current year information: Operating loss Liabilities: Notes payable, Big Apple Bank. 40,000 Notes payable, Grapefruit (individual) 40,000 $(240,000) On January 1, Orange (an individual) bought 50% of Citrus Corporation stock for $60,000. How much of the operating loss may Orange deduct currently? Assume the excess business loss limitation does not apply. O $80,000 $60,000 o $100,000 $120,000