Answer the following questions concisely based on lastweek's discussion. Save your answer as document orpdf and attach here. NO ANSWERS ON THE COMMENTSECTION.A, B and C are partners with C as the industrial partner.A contributed P50,000 and B contributed P100,000. Thepartnership operates a burger joint and agreed that theindustrial partner will receive 10% of the profits.1. At the end of the year, the partnership suffered lossesof P50,000. How will the losses be shared?2. If due to said losses, they decided to use the burgerjoint as a hub to resell "smuggled" meats and usingthereby their existing freezer and grounding machine. Isthe partnership valid? what are the effects of suchoperation? Explain.

A partnership is a form of business association whereby at least 2 or more persons contribute funds…

Answered: A, B and C are partners with C as the…

SWFT Corp Partner Estates Trusts

42nd Edition

ISBN:9780357161548

Author:Raabe

Publisher:Raabe

Chapter10: Partnerships: Formation, Operation, And Basis

Section: Chapter Questions

Problem 2BCRQ

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Your client is a partnership, ARP Associates, which is an engineering consulting firm. Generally, ARP bills clients for services at the end of each month. Client billings are about 50,000 each month. On average, it takes 45 days to collect the receivables. ARPs expenses are primarily for salary and rent. Salaries are paid on the last day of each month, and rent is paid on the first day of each month. The partnership has a line of credit with a bank, which requires monthly financial statements. These must be prepared using the accrual method. ARPs managing partner, Amanda Sims, has suggested that the firm also use the accrual method for tax purposes and thus reduce accounting fees by 600. Assume that the partners are in the 35% (combined Federal and state) marginal tax bracket. Write a letter to your client explaining why you believe it would be worthwhile for ARP to file its tax return on the cash basis even though its financial statements are prepared on the accrual basis. ARPs address is 100 James Tower, Denver, CO 80208.
Pozon, Ventic and Biore are partners. Pozon is an industrial partner. During the first year of operation, the firm realized a profit of P30,000. During the second year, the firm sustained a loss of P60,000. In the Articles of Partnership, it was agreed that Pozon, the industrial partner would get one-third of the profit but would not share in the losses. How much will Pozon, the industrial partner get? a.Pozon will get only P10,000 which is one-third of the profit. b.Pozon will get only P20,000 in the first year and none in the second year. c.Pozon will share in the loss in the second year. d.Pozon will get only P20,000 which is 1/3 of the profit of first year of operations
Holly Renfro contributed a patent, accounts receivable, and $20,000 cash to a partnership. The patent had a book value of $8,000. However, the technology covered by the patent appeared to have significant market potential. Thus, the patent was appraised at $92,000. The accounts receivable control account was $45,000, with an allowance for doubtful accounts of $3,000. The partnership also assumed a $14,000 account payable owed to a Renfro supplier.Provide the journal entry for Renfro’s contribution to the partnership.
Jenkins, Willis, and Trent invested $220,000, $385,000, and $495,000, respectively, in a partnership. During its first yeal the firm recorded profit of $615,000. Required: Prepare entries to close the firm's Income Summary account as of December 31 and to allocate the profit to the partners under each of the following assumptions: a. The partners did not produce any special agreement on the method of distributing profits. c. The partners agreed to share profit by providing annual salary allowances of $115,000 to Jenkins, $125,000 to Willis, and $60,000 to Trent; allowing 15% interest on the partners' beginning investments; and sharing the remainder equally.
THEY APPOINTED MARAWI AS MANAGING PARTNER, WHO WILL RECEIVE A SALARY OF P 10,000 PER MONTH. MITOR WILL BE AN INDUSTRIAL PARTNER WHO WILL RECEIVE A JUST SUM OF 10% OF THE NET PROFITS. MISERIA ON THE OTHER HAND , CHOSE TO BE A LIMITED PARTNER AND THE LIQUIDATING PARTNER. THE PROFITS WILL BE DIVIDED ACCORDING TO THEIR CAPITAL CONTRIBUTION AFTER DEDUCTING THE SALARIES OF MANAGING PARTNER MARAWI AND 10% SHARE OF MITOR. REQUIRED: PREPARE THE TRIAL BALANCE

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