1. Show solution in good accounting form ABC, DEF and GHI decided to form a partnership contributing the following from each of their existingbusinesses:DEFGHIABC50,000 75,000Cash55,000100,000 50,000 60,000ReceivablesAllowance for overvaluationInventories2,500 5,0003,000100,00055,000350,000PPEGoodwill50,000Liabilities200,000 45,000The partners agree on the following:a.The receivables of each partner is to have a 95% net realizable value.Inventories of ABC costing P10,000 are deemed to be worthless.b.C.The PPE has a current value of P400,000 and is subject to a P200,000 mortgage (the liabilityof DEF). The partners agree to shoulder % of the loan plus accrued interest on the loan at10% for one year eating during examinations, quizzes or plagiarism in connectionme: 1st violation-d.Liabilities of GHI are understated by P5,000.e.DEF is to be given a goodwill equal to 5% his adjusted capitalf.The partners are to share in the ratio of 4:5:1 to ABC, DEF and GHI, respectively.g.The partners are to invest or withdraw additional cash to make their capital balances equalto their profit and loss ratios with DEF's capital to be used as the basis.Determine: The amount of additional cash investment or withdrawal of ABC.Q7 INIVSVERSO101

Name: 1. Show solution in good accounting form ABC, DEF and GHI decided to f
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Description: 1. Show solution in good accounting form ABC, DEF and GHI decided to form a partnership contributing the following from each of their existingbusinesses:DEFGHIABC50,000 75,000Cash55,000100,000 50,000 60,000ReceivablesAllowance for overvaluationInvent

Partnership : It is an arrangementÂ by two or more partiesÂ forÂ operatingÂ theÂ business.…

Answered: accounting

Business

Accounting

accounting

SWFT Essntl Tax Individ/Bus Entities 2020

23rd Edition

ISBN:9780357391266

Author:Nellen

Publisher:Nellen

Chapter14: Partnerships And Limited Liability Entities

Section: Chapter Questions

Problem 2BD

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The following is the current balance sheet for a local partnership of doctors: Cash and current assets $ 80,000 Liabilities $ 80,000 Land 240,000 A, capital 60,000 Building and equipment (net) 190,000 B, capital 80,000 C, capital 130,000 D, capital 160,000 Totals $ 510,000 Totals $ 510,000 The following questions represent independent situations: E is going to invest enough money in this partnership to receive a 20 percent interest. No goodwill or bonus is to be recorded. How much should E invest? E contributes $50,000 in cash to the business to receive a 10 percent interest in the partnership. Goodwill is to be recorded. Profits and losses have previously been split according to the following percentages: A, 30 percent; B, 10 percent; C, 40 percent; and D, 20 percent. After E makes this investment, what are the individual capital balances? E contributes $52,000 in cash to the business to receive a 20 percent…