1. A, B, C are partners operating a small store for two years. The partners are considering the possible incorporation of the partnership. What are the disadvantages and disadvantages offered by such a change?
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- S1 - A partnership may be formed through verbal agreement, but for a corporation to exist, it requires special authority or grant by the state. S2 - A corporation can continue to exist, despite the death or withdrawal of a shareholder. a. Both statements are true b. Both statements are false c. One statement is true, and the other one is false S-1 The minimum number of incorporators is 15. S-2 The maximum number of members of a close corporation is 20. a. Both statements are true b. Both statements are false c. One statement is true, and the other one is falseAt the beginning of the current year, Cameron and Harold formed the CH Partnership by transferring cash and property to the partnership in exchange for a partnership interest, with each having a 50% interest. Specifically, Cameron transferred property having a $35,000 FMV, a $32,000 adjusted basis, and subject to a $5,000 liability, which the partnership assumed. Harold contributed $60,000 cash to the partnership. The partnership also borrowed $35,000 from the bank to use in its operations. All liabilities are recourse for which the partners have an equal economic risk of loss. During the current year, the partnership earned $19,000 of net ordinary income and reinvested this amount in new property. Read the requirements.At the beginning of the current year, David and Garrett formed the DG Partnership by transferring cash and property to the partnership in exchange for a partnership interest, with each having a 50% interest. Specifically, David transferred property having a $40,000 FMV, a $20,000 adjusted basis, and subject to a $15,000 liability, which the partnership assumed. Garrett contributed $70,000 cash to the partnership. The partnership also borrowed $31,000 from the bank to use in its operations. All liabilities are recourse for which the partners have an equal economic risk of loss. During the current year, the partnership earned $25,000 of net ordinary income and reinvested this amount in new property.
- Select the best answer. Which of the following statements regarding various entities is true? O O O A. A business entity with only one owner is classified as a corporation or is disregarded. Question Q 10 B. A disadvantage of a pass-through entity is double taxation. C. By default, an eligible entity that has a single member will be treated as a limited partnership. Partnerships are taxpaying entities, because tax attributes pass through to the individual partners. O D. Submit Answers 100% CompleteAn advantage of the partnership as a form of business organization would be A. Partners do not pay income taxes on their share in partnership income. B. A partnership is bound by the act of the partners. C. A partnership is created by the mere agreements of the partners. D. A partnership may be terminated by the death or withdrawal of a partner. Rose the Red Inc. has issued 200,000 shares of P1 par value ordinary shares at P12. If it repurchases 13,000 shares during 2019 at P14 profit would decrease by P26,000 shareholders' equity would decrease by P182,000 shareholders' equity would decrease by P26,000 profit would decrease by P156,000TRUE or FALSE The accounting for partnerships differs from the accounting for sole proprietorships, corporations and cooperatives in regard to the accounting for equity but not for assets and liabilities. A partnership is relatively easy to form but also easy to dissolve. Ms. A contributed equipment with carrying amount of P100 and fair value of P200 to a partnership. If no bonus is given to any partner, Ms. A's capital account should be credited for P200. Fact pattern: Mr. Debinsky contributed inventory with purchase cost of P300 and net realizable value of P350 to a partnership. Mr. Debinsky acquired the inventory on account and the partnership will assume the unpaid balance of P80. 4. The partnership will record the inventory at P350. 5. Mr. Debinsky's capital account in the partnership books will be credited for P270. Fact pattern: Mr. B and Ms. C formed a partnership. The partners have equal interests in the partnership and their respective contributions shall reflect this…
- 8. In case the partnership makes profit, how will an industrial partner be given a share?A. what is just equitableB. equallyC. arbitrarilyD. proportion to capital contribution 9. Which of the following is not considered a legitimate expense of a partnership?A. Supplies used in the partnership’s officeB. Depreciation on assets contributed to the partnership by partnersC. Salaries for management hired to run the business D. Interest paid to partners based on their capital balancesPartnership(taxation) Assume that all partnership interests expressed as percentages are those percentages of both profits/losses and capital. Assume that all liabilities are recourse. a) Three individuals, C, D, and E, form CDE LLC. CDE LLC does not "check the box" to become a corporation and therefore is treated as a partnership for tax purposes. C contributes land, AB 70 FMV 100 and cash of 20. D contributes inventory (in the hands of both D and CDE), AB 50 FMV 120. E contributes services. In exchange, each partner receives a 1/3 interest in the LLC. What are the consequences to all of the parties? (b) Same as (a) except that C's land is subject to an assumable mortgage of 30 and has a FMV of 1301. Which of the following statements concerning partnership is true? a. A partnership is a legal entity separate and distinct from the individual partners. b. Individual partners are jointly liable for the debts and obligation of a partnership. c. Income tax is levied on the individual partners’ shares of net income of a partnership and is reported in their personal tax returns. d. All of the above is true. 2. Under what circumstances can the closing of the income summary account result in a debit to one partners’ capital account and credits to the other partners’ capital accounts? a. The results of operations are divided in a profit and loss ratio and the partnership sustained a loss for the period. b. The results of operations are allocated in a profit and loss ratio and the partnership’s net income was very low. c. The results of operations are divided in the average capital ratio and one partner had a low capital balance.…
- 1. What is the total capital balance of the partnership after the admission by Marshall? 2. What is the capital share of Marshall after he was admitted in the pait ship? 3. What is the percentage share of Marshall in the profits and losses 4. What is the combined gain realized by Manuel and Marcus upon the sale of a portion of their interest in the partnership to Marshall? 5. What is the gain realized by Manuel upon the sale of a portion of his interest in the partnership to Marshall4. In the partnership books, there are as many capital and drawing accounts as there are partners. 5. A partner's contribution in the form of noncash asset should be recorded at its fair market value even if there is agreed capital. 6. A partnership is much easier and less expensive to organize than a corporation.1. What is the total capital balance of the partnership after the admission by Marshall? 2. What is the capital share of Marshall after he was admitted in the pait ship? 3. What is the percentage share of Marshall in the profits and losses 4. What is the combined gain realized by Manuel and Marcus upon the sale of a portion of their interest in the partnership to Marshall? 5. What is the gain realized by Manuel upon the sale of a portion of his interest in the partnership to Marshall 6. What is the gain realized by Marcus upon the sale of a portion of his interest in the partnership to Marshall?