TAX 655 - Module Seven Activity

TIF 5-1 Ethics in Action Edward Seymour is a financial consultant to Cornish Inc., a real estate syndicate. Cornish fi- nances and develops commercial real estate (office buildings) projects. The completed projects are then sold as limited partnership interests to individual investors. The syndicate makes a profit on the sale of these partnership interests. Edward provides financial information for prospective investors in a document called the offering “prospectus." This document discusses the financial and legal details of the limited partnership investment. One of the company's current projects is called JEDI 2, and has the syndicate borrowing money from a local bank to build a commercial office building. The interest rate on the loan is 6.5% for the first four years. After four years, the interest rate jumps to 15% for the remaining 20 years of the loan. The interest expense is one of the major costs of this project and significantly affects the number of renters needed for the…

GE. 10:13 O O O 01:57:23 Remaining Multiple Choice Z and D practice their profession in a general professional partnership and share profits 6:2. The firm reported the following: • Gross Receipts- P3,000,000 • Professional Expenses-P1,400,000 • Interest from bank deposits-P80,000 Compute for the amount included in the gross income of Z subject to regular income tax. P80,000 P1,200,000 P1,260,000 P2,310,000 33 of 60

OverviewDiscuss tax planning opportunities utilizing a partnership structure. InstructionsRead Section 10.6 “Tax Planning” in Chapter 10. If you were going to start a business with a few of your closest friends (or family), would you choose to form a partnership? Why or why not?

Problem 2: Statement of Changes in Equity - Partnership The following are taken from the accounting records of JFK Partnership. December 31, 2020 December 31, 2021 James, Capital P54,900 P64,900 Christine, Capital 53,200 63,900 Lolly, Capital 44,890 50,890 The partnership generated net income of P51,600 in 2020. According to the partnership contract, James, Christine and Lolly share profit and loss equally. The partnership contract allows each partner to withdraw P1,000 monthly. James and Christine each contributed P5,000 during the year. Loll did not make any contributions during the year. Required: 1. Prepare the partnership's Statement of Changes in Equity. 2. Determine if any of the partners violated the partnership contract provision on Drawings. Identify who among the partners it is.

PROBLEM 1On June 30, 20x8 A, the sole proprietor of A Inc, expandsthe company and establishes a partnership with B and C. Thepartners plan to share profits and losses as follows: A, 50%;B, 25% and C 25%. They also agree that the beginning capitalbalances of partnership will reflect this same relationship.A asked B to join the partnership because his many businesscontacts are expected to be valuable during the expansion. B iscontributing P40,000 and a building that has an original cost ofP520,000, book value of P420,000, tax assessment of P310,000 andfair value of P370,000. The building is subject to a P242,000mortgage that the partnership will assume. C is contributingP66,000 and marketable securities costing P252,000 but arecurrently worth P345,000.A's investment in the partnership is his business. He plansto pay off the notes with his personal assets. The other partnershave agreed that the partnership will assume the accounts payable.The balance sheet for the A Inc follows:…

Use Group 4 additional information

5 Required information Phil Williams and Liz Johnson are 60% and 40% partners, respectively, in Williams & Johnson Partnership. Their beginning basis is $33,000 for Phil and $31,000 for Liz. The partnership had the following activity during the year: Income Interest income Dividend income (qualified) Long-term capital gains Total revenue Expenses Salaries and wages (nonpartners) Guaranteed payments Williams Johnson Depreciation (MACRS-includes $9,000 $ 179 expense) Interest expense Taxes and licenses Meals (100%) Auto Insurance (nonpartner health) Accounting and legal Repairs Charitable contributions Payroll penalties Total expenses Net income $ 336,123 1,259 4,586 13,458 $ 355,426 $ 47,000 Williams & Johnson Partnership's non-financial information is as follows: • Name: Williams and Johnson Partnership 75,000 50,000 41,888 5,220 15,548 15,257 5,254 6,000 2,800 1,200 2,500 500 $ 268,167 $ 87,259 Check m

Q8 ABC Bakers is a partnership concern owned and operated by Mr. X and Mr. Y. Identify the option that reflect the correct treatment of accounting transaction in the books of ABC Bakers? Select one: a. Mr. X borrowed Mr. Y money from a partnership’s bank account to buy a car for personal use: Debit vehicle; Credit Bank b. Mr. Y purchased an oven for the bakery using his personal credit card: Debit Oven (Asset); Credit Equity Capital c. Mr. X paid his house rent from the business bank account. Debit Rent expense; Credit Bank B d. Mr. Y paid out of bu

Journalizing Partner's original investment.  A

Partnerships: Basic Considerations and Formation 473 NAME: SCORE: SECTION: PROFESSOR: Problem #2 Formation of a Partnership Gogola and Paglinawan have just formed a partnership. Gogola contributed cash of P1,260,000 and computer equipment that cost P540,000. The fair value of the computer is P360,000. Gogola has notes payable on the computer of P120,000 to be assumed by the partnership. Gogola is to have 60% capital interest in the partnership. Paglinawan contributed only P900,000. The partners agreed to share profit and loss equally. Gogola should make an additional investment or (withdrawal) of

Good day p,ease help me with this activity from my textbook ICE ACTIVITY 4 Choose the most appropriate alternative from the options provided for each of the following questions. Write down ONLY the letter of your choice next to the corresponding number (e.g. 4.27  =  B). Note: where applicable, assume a VAT rate of 15%.   4.1     The balances of the following account(s) in the general ledger of a partnership will contribute to the balance of the total equity section of the statement of financial position. A        Capital accounts B        Current accounts C        Reserve accounts D        All of the above   4.2     An accrued expense of R500 was recorded as a prepaid expense during the adjustment process. The effect of the error would have caused the________. A        Gross profit to be understated by R500 B        Gross profit to be overstated by R500 C        Net profit to be understated by R1000 D        Net profit to be overstated by R1000   4.3     Which of the following will…

Homework Activity 1 A, B and C are in Partnership sharing profits and losses in the ratio of 2:1:1. During the year ending 31st Dec 2019, the business made a profit of RO 64,000 before providing Interest on capital : A 2,000,          B 1500,          C 1000 Interest on drawings: A 200,             B 150,            C 100 Salary to Partners A 500              B 700             C 600 Commission to Partners A 200              B 300             C 400 Prepare a profit and loss appropriation account to show the distribution of profit among the partners.

C1

Question 20 of 75 S1: It is both common and good business practice for partners to pay their personal bills with partnership funds. S2: Salary allowances are allocations of income that appear in the expenses section of the income statement. Select the correct response. O S1 is False, S2 is True O s1 is True; S2 is False O s1 & S2 are False O s1 & S2 are True ( Previous

1 1 . NAME: SECTION: Partnerships: Basic Considerations and Formation 465 Problem #3 A Sole Proprietor and an Individual with No Business Form a Partnership SCORE: PROFESSOR: Espanol operated a specialty shop that sold fishing equipment and accessories. Her post-closing trial balance on Dec. 31, 2022 is as follows: Accounts Payable Espanol, Capital Cash Accounts Receivable Allowance for Uncollectible Accounts Inventory Equipment Accumulated Depreciation Fish Post-Closing Trial Balance Dec. 31, 2022 Debit P 36,000 150,000 440,000 135,000 P761,000 Credit P 16,000 75,000 30,000 640,000 P761,000 Espanol plans to enter into a partnership with trusted associate, Selisana, effective Jan. 1, 2023. Profits or losses will be shared equally., Espanol is to transfer all assets and liabilities of her shop to the partnership after revaluation. Selisana will invest cash equal to Espanol's investment after revaluation. The agreed values are as follows: accounts receivable (net), P140,000; inventory,…

QUESTION 1 Kumaresan and Cheng are watch repairmen who want to form a partnership and open a jewellery store. An attorney prepares their partnership agreement, which indicates that assets invested in the partnership will be recorded at their fair market value and that liabilities will be assumed at book value. The assets contributed by each partner and the liabilities assumed by the partnership are as the following: Assets Kumaresan Cheng Total 40,000 52,000 4,000 1,000 20,000 30,000 20,000 3,000 500 70,000 72,000 7,000 1,500 30,000 Cash Accounts receivable Allowance for uncollectable accounts Supplies Equipment Liabilities Accounts payable 10,000 32,000 9,000 41,000 REQUIRED: Prepare the journal entries necessary to record the original investments of Kumaresan and Cheng in the partnership.

Chris Gray, Bryson Alef, and Nick Pirollo are founding partners of their company, Scholly. Assume that Chris, Bryson, and Nick decide to expand their business with the help of general partners. Required 1. What details should Chris, Bryson, Nick, and their future partners specify in the general partnership agreements? 2. What advantages should Chris, Bryson, Nick, and their future partners be aware of with respect to organizing as a general partnership? 3. What disadvantages should Chris, Bryson, Nick, and their future partners be aware of with respect to organizing as a general partnership?

Pl3ase answ3 in a table format like in an exc3l or g00gle sheets.

2:18 O 42 docs.google.com/forms Problem: Formation Melai admits Nora as a partner in business. Just before the partnership's formation, Melai's books showed the following: Cash 2,600 Accounts Receivable 12,000 Merchandise Inventory Accounts Payable Melai, Capital 18,000 6,200 26,400 It was agreed that, for purposes of establishing Melai's investment in the firm, the following adjustments shall be reflected: > Allowance for bad debts of 2% should be set up. > Merchandise Inventory should be valued at P20,200. > Prepaid Expenses of P350 and accrued expenses of P400 should be recognized. 1. How much is the adjusted capital of Melai prior to admission of Nora? Your answer 2. How much cash should Nora invest to secure a one-third interest in the partnership? Your answer 3. If Nora contributed an equipment with carrying value of P4,000 and fair value of P4,500, how much cash was contributed for a one-fifth interest in the partnership? Your answer

Question 5 Allan, Bryan and Catty are partners in a partnership engaging in a food catering business. The terms of the partnership agreement until 30 September 2021 were as follows: Allan Bryan Catty RM RM RM Capital contribution Salary per annum Interest on capital per annum Partners' private expenses 90,000 60,000 105,000 75,000 72,000 54,000 5% 5% 5% 10,000 9,000 7,000 On 30 September 2021, Bryan withdrew as a partner. Upon the withdrawal of Bryan, the interest on capital for Allan and Catty was revised to 4% per year with the other terms remaining the same. The profit or loss is shared equally among the partners throughout the whole year. The provisional adjusted income for the year ended 31 December 2021 was RM280,926. The capital allowance on the plant and machinery was RM4,000. The partnership made a cash donation of RM6,000 to an approved institution on 30 June 2021. Required: Compute the divisible income for the partnership and the total income of the partners for the year of…