8:43 "l944. On January 1, 2020, Rus and An decided to form a partnership. At the end of the year, apartnership made a net income of P75,000. The capital account of the partnership shows thefollowing transactions.RUSANJANUARY 130,00040,000MAY 16,000JULY 1(12,000)8,000(3,000)(2,000)Assuming that an interest of 20% per annum is given on average capital and the balance of theAUGUST 1ОСТОВER 112,000profits is allocated equally, the allocation of profits should be -5. Pak and Ner are partners who share profits and losses in the ratio of 70:30%, respectively. Pak'ssalary is Php 50,000 and Php 25,000 for Ner. The partners are also paid interest on their averagecapital balances. In 2020, Pak's received 30,000 of interest and Ner, 20,000. The profit and lossallocation are determined after deductions for the salary and interest payments. If Pak's share inthe residual income was P56,000, what was the total partnership income?EndJ GC 8:33 "4996Activity #21. Ah and Par entered into partnership by investing the following assets:АНPARCASH300,000450,000EQUIPMENTS200,000450,000BUILDING3,400,000FURNITURE AND FIXTURES800,000The building is subject to a mortgage of Php 800,000, which is to be assumed by the partnership.The partnership agreement provides that Ah and Par share profits and losses 30 percent and 70percent, respectively.Assuming that the partners agreed to bring their respective capital in proportion to theirrespective profit and loss ratio, and using Par's capital as the base, how much cash is to beinvested by Ah?2. Tha, Rah and Gee entered into partnership by investing the following assets:THARAHGEECASH60,00072,400193,000EQUIPMENT900,000FURNITURE AND FIXTURES40,000219,60015,000Although Gee has contributed the most cash to the partnership, Gee did not have the fullamount of P180,000 available and was force to borrow personally P120,000. The deliveryequipment contributed by Tha has a mortgage of P500,000 and the partnership is to assume theresponsibility for the loan. The partners agree to divide profits and losses 40% to Tha; 40% toRah; and 20% to Gee.The partners further agreed to bring their respective capital interest in proportion to their profitand loss ratio.Using the bonus method, capital transfer among partners should be made3.The partnership contract for the Thick and Thock Partnership provided that Thick is to receiveand annual salary of P70,000, Thock is to receive an annual salary of P50,000, and the remainingprofit or loss is to be divided equally between the two partners. Net income of the Thick andThock Partnership for the year ended December 31, 2021 was P100,000. The closing entry fornet income on December 31, 2021 is a debit to Income Summary for P100,000 and credits toThick Capital and Thock Capital, respectively of:4. On January 1, 2020, Rus and An decided to form a partnership. At the end of the year, apartnership made a net income of P75,000. The capital account of the partnership shows thefollowing transactions.RUSANJANUARY 130,00040,000MAY 16,000JULY 1(12,000)8,000(3,000)12 0001AUGUST 1OCTOBER 112 000

4. On January 1, 2020, Rus and An decided to form a partnership. At the end of the year, a partnership made a net income of P75,000. The capital account of the partnership shows the following transactions. RUS AN JANUARY 1 MAY 1 JULY 1 | AUGUST 1 ОСТОBER 1 30,000 6,000 40,000 8,000 (3,000) (2,000) Assuming that an interest of 20% per annum is given on average capital and the balance of the (12,000) 12,000 profits is allocated equally, the allocation of profits should be -

4. On January 1, 2020, Rus and An decided to form a partnership. At the end of the year, a partnership made a net income of P75,000. The capital account of the partnership shows the following transactions. RUS AN JANUARY 1 MAY 1 JULY 1 | AUGUST 1 ОСТОBER 1 30,000 6,000 40,000 8,000 (3,000) (2,000) Assuming that an interest of 20% per annum is given on average capital and the balance of the (12,000) 12,000 profits is allocated equally, the allocation of profits should be -

SWFT Essntl Tax Individ/Bus Entities 2020

23rd Edition

ISBN:9780357391266

Author:Nellen

Publisher:Nellen

Chapter6: Losses And Loss Limitations

Section: Chapter Questions

Problem 20P

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LO.2 In the current year, Bill Parker (54 Oak Drive, St. Paul, MN 55164) is considering making an investment of 60,000 in Best Choice Partnership. The prospectus provided by Bills financial planner indicates that the partnership investment is not a passive activity and that Bills share of the entitys loss in the current year will likely be 40,000, whereas his share of the partnership loss next year will probably be 25,000. Write a letter to Bill in which you indicate how the losses would be treated for tax purposes in the current year and the following year.
10. The following balance sheet was prepared for the X, Y and Z partnership on March 31, 2021: Cash –P25,000; Other Assets – P180,000; Liabilities – P52,000; X, Capital (40%) – P40,000; Y, Capital (40%) –P65,000; Z, Capital (20%) – P48,000. The partnership is being liquidated by the sale of assets ininstallments. The first sale of non-cash assets having book value of P90,000 realizes P50,000. Assumethateach partner properly received some cash after the second sale of assets. The cash to be distributedamountto P14,000 from the third sale of assets, and unsold assets with a P6,000 book value remain. How shouldthe P14,000 be distributed to X, Y and Z respectively? a. P5,600; P6,500; P2,800b. P5,000; P5,000; P4,000c. P0; P11,200; P2,800d. P5,600; P5,600; 2,800
21. The capital balances in BNM Partnership are: BBB, capital P600,000; NNN, capital 500,000and MMM, capital 400,000 and income ratio is 5:3:2, respectively. The BNM Partnership is formed by admitting FFF to the company with cash investment of P600,000 for a 25% interest in capital. What is the amount of bonus to be credited to MMM capital in admitting FFF? A. 100,000B. 75,000C. 37,500D. 15,000
1. As of July 1, 2020, MM and AA decided to form a partnership. Their balance sheets on this date are: Cash P 15,000 P 38,000Accounts Receivable 680,000 255,000Allowance for doubtful accounts (140,000) (30,000)Merchandise Inventory 202,000Machinery and Equipment 150,000 270,000Total P705,000 P735,000 Accounts Payable 135,000 240,000MM, capital 570,000AA, capital - 495,000Total P705,000 P735,000 The partners agreed that the machinery and equipment of MM is under depreciated by P15,000 and that of AA by P45,000. Allowances for doubtful accounts is to be set up amounting to P120,000 for MM and P40,000 for AA. The partnership agreement…
4. X, Y, and Z have capital balances of P40,000.00, P50,000.00, and P18,000.00 and a profit – sharing ratio 4:2:1, respectively. If X received P8,000.00 upon liquidation of the partnership, the total amount received by partner Z was: a. P10,000.00 b. P 8,000.00 c. P34,000.00 d. P -0- 5. Assume the same facts in No. 4, above, except that X received P26,000.00 as a result of the liquidation. The total gain/loss on realization amounted to: a. P 3,500.00 b. P14,000.00 c. P 7,000.00 d. P24,500.00
22. The balance sheet as of September 30, 2030, for the partnership of DDD, EEE and FFF shows the following information: Assets, P360,000 ; DDD, loan, P20,000 ; DDD, capital, P83,000 ; EEE, capital , P77,000 ; FFF, capital, P 180,000. It was agreed among the partners that DDD retires from the partnership, and it was also further agreed that the assets should be adjusted to their fair value of P345,000 as of September 30, 2030. Net loss prior to the retirement of DDD amount to P70,000. The partnership is to pay DDD P62,000 cash for DDD's partnership interest, which would include the payment of his loan. DDD, EEE and FFF share profit 40%, 15% and 45% respectively. After DDD's retirement, how much would FFF's capital balance be?A. P66,000B. P147,000C. P136,500D. P185,250
19. Following is the balance sheet of the WXYZ Partnership at March 31, 2021, when the partnership isto be liquidated: Cash – P6,000; Other Assets – P126,000; Liabilities – P12,400; W, Loan – P12,000; X, Loan– P14,400; Z, Loan – P9,600; W, Capital (25%) – P16,200; X, Capital (25%) – P12,000; Y, Capital (25%)– P37,700; Z, Capital (25%) – P17,700. During the month of April 2021, assets having book value ofP18,000 are sold at a loss of P2,400. Liquidation expenses of P600 are paid as well as P7,200 of theliabilities. Of the liabilities shown in the balance sheet, P240 represents salary payable to Z and P160represents salary payable to Y. On April 30, 2021, how much cash will be distributed to the partners? a. W – 0; X – 0; Y – 0; Z – P9,000b. W – P1,950; X – P1,950; Y – P1,950; Z – P1,950c. W – 0; X – 0; Y – 0; Z – P1,950d. W – 0; X – 0; Y – P9,000; Z – 0
20. The following information pertains to ABC Partnership of AAA, BBBB and CCC: AAA (20%) P 200,000 BBB (30%) 200,000 CCC (50%) 300,000 On this date, the partners agreed to admit DDD into the partnership. Assuming DDD purchased fifty percent of the partners capital and pays P500,000 to the old partners, how much of this amount will go to AAA? a. 100,000b. 130,000c. 166,667d. 150,000 21. The capital balances in BNM Partnership are: BBB, capital P600,000; NNN, capital 500,000and MMM, capital 400,000 and income ratio is 5:3:2, respectively. The BNM Partnership is formed by admitting FFF to the company with cash investment of P600,000 for a 25% interest in capital. What is the amount of bonus to be credited to MMM capital in admitting FFF? A. 100,000B. 75,000C. 37,500D. 15,000 22. The balance sheet as of September 30, 2030, for the partnership of DDD, EEE and FFF shows the following information: Assets, P360,000 ; DDD, loan, P20,000 ; DDD, capital, P83,000 ; EEE,…
On March 1, 2018, X and Y formed a partnership. The partners contributed the following:X YCash P500,000 P400,000Accounts Receivable 300,000 200,000Allowance for doubtful accounts 50,000 20,000Inventory 150,000 100,000Equipment 500,000 200,000Accumulated depreciation 100,000 25,000Accounts Payable 50,000 400,000Note Payable 200,000The partners agree on the following:a. P10,000 of the accounts receivable of X is to be written-off.b. An allowance for doubtful accounts of 15% is to be established on the remaining receivables of Xand Y.c. The inventory of Y is to be valued at P140,000.d. The equipment of X is under depreciated by P20,000 and the equipment of Y has a fair value ofP190,000.e. The note of X is dated December 1, 2017 and is subject to a 12% interest . Interest had not yetbeen accrued.f. The partners agree on a 2:1 profit and loss ratio.g. The partners agree to bring their capital balance proportionate to their profit and loss ratio.If Y's Capital is to be used as basis, how…
35. The statement of financial position for the partnership of BBB, CCC and DDD who share profits in the ratio of 2:1:1, shows the following balances just before the liquidation: Cash P12,000Other assets 59,500Liabilities 49,000BBB, capital 22,000CCC, capital 15,500DDD, capital (15,000) On the first installment of the liquidation, a gain of P8,525 was realized from the sale of certain assets. Liquidation expenses of P1,000 was paid, and additional liquidation expenses are anticipated. Liabilities paid amounted to P34,400. Remaining book value of other assets is P1,550. On the first payment to partners, CCC receives P6,250. The amount of cash withheld for anticipated liquidation expenses and unpaid liabilities is: a. 11,475b. 14,600c. 26,075d. 29,200
2. Psalm and Selah decided to form a partnership on June 30, 2030, Assets contributed by the partners are: Psalm Selah Book Value Fair Value Book Value Fair value Cash P375,000 P375,000 P875,000 P875,000 Merchandise inventory 95,000 125,000 Furniture and fixtures 350,000 312,500 872,500 937,500 Transportation equipment 3,262,500 2,812,500 The transportation equipment is subject to a mortgage loan of P1,125,000, which is to be assumed by the partnership. The partnership agreement provides that Psalm and Selah share profits and losses of 30% and 70% respectively. Assuming that the partners agreed to bring their respective capital in proportion to their profit and loss ratio, using Selah capital as base. How much additional cash is to be invested (withdrawn) by Psalm? A. P(687,500)B. P(987,500)C. P 875,000 D. P 687,500
2. The capital balances of partners Po and Gi are as follows:Po GiJanuary 1, Beginning P100,000 P200,000June 30, investment 50,000 -September 30, withdrawal - (100,000)Balance P150,000 P100,000Their agreement is to share profit and loss based on average capital balance. How muchis the share of Gi in the partnership’s income of P450,000?