Dewey, Huey, and Louie created the Sleepy Times partnership to sellpajamas. The Sleepy Times partnership has the following balancesheet:Unrealized receivablesInventoryLandCapital, DeweyCapital, HueyCapital, LouieBasis0120,00060,000$180,000$60,00060,00060,000$180,000FMV$30,000150,00090,000$270,0004$90,00090,00090,000$270,000At his request, Dewey receives a distribution consisting of 4 ofthe unrealized receivables and of the inventory, reducing hisinterest in the partnership from 1/3 to 1/5. You are going tocalculate the tax effects of this distribution to Dewey and thepartnership.

Dewey, Huey, and Louie have formed the Sleepy Times Partnership to sell pajamas. The partnership's…

At his request, Dewey receives a distribution consisting of 4 of the unrealized receivables and of the inventory, reducing his interest in the partnership from 1/3 to 1/5. You are going to calculate the tax effects of this distribution to Dewey and the partnership.

At his request, Dewey receives a distribution consisting of 4 of the unrealized receivables and of the inventory, reducing his interest in the partnership from 1/3 to 1/5. You are going to calculate the tax effects of this distribution to Dewey and the partnership.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Dewey, Huey, and Louie created the Sleepy Times partnership to sell pajamas. The Sleepy Times partnership has the following balance sheet: Unrealized receivables Inventory Land Capital, Dewey Capital, Huey Capital, Louie Basis 0 120,000 60.000 $180,000 $60,000 60,000 60.000 $180,000 be FMV $30,000 150,000 90.000 $270,000 $90,000 90,000 At his request, Dewey receives a distribution consisting of % of the unrealized receivables and % of the inventory, reducing his interest in the partnership from 1/3 to 1/5. You are going to calculate the tax effects of this distribution to Dewey and the partnership. Under 751(b), Dewey is first treated as having been distributed $ AV of land in a hypothetical 90.000 $270,000 distribution. Dewey's basis in the hypothetically distributed land is $ Sleepy Times is treated as having bought back the land with $ A/ A/ of unrealized receivables and $ of inventory. Dewey will have a gain on the IRC Sec. 751(b) exchange of $ A/ and the character of the gain will…
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GWS and BCP organized the GB Partnership on January 1, 2018. The following entries were made in their capital accounts during 2018. Debit Credit GWS, Capital: January 1 April 1 October 1 P315,000 P105,000 175,000 Debit Credit ВСР, Саpital: January 1 March P413,000 1 September 1 November 1 52,500 105,000 94,500 Required: А. If the partnership profit for the year 2018 computed before salaries or interest is P217,000, determine its distribution between the partners under each of the following independent profit-sharing agreements: (1) Interest at 6% is allowed on average capital investments and the remainder of the profit is divided equally. (2) A salary of P126,000 is to be credited to BCP, 6% interest is allowed on each partner on his ending capital balance and the remainder of the profit in the ratio of 3:2. Salaries are allowed GWS and BCP in amounts of P119,000 and P133,000, respectively, and the remaining profit or resulting loss is divided in the ratio of average capital balance.…
Problem IAriel, Beauty and Cindy decided to form Disprin Partnership with 2:2:1 profit sharing. Both Ariel and Beauty have existing business. The balance sheet of the two are shown below together with their agreement prior to formation. Ariel BeautyCash 113 126Accounts Receivables 200 100Inventories 50 50Equipment 80 0Furniture 0 30Prepayments 5 15TOTAL 448 321 Accounts Payable 75 95Capital 373…
The following information relates to partner for the year ended 29 February 2020: Current account credit balance on 29 February 2020 20 000 Profit share 50 000 Salaries 180 000 Interest on capital 24 000 Drawings 220 000 Interest on drawings 2 000 What is the balance in the Current account of the partner on 01 March 2019? OA. R12 000 DR. B. R116 00O DR OC. R52 000 CR D. R12 000 CR S Type here to search