Chapter 12 Accounting for Partnerships and Limited Liability Companies 2-3 Dividing partnership income OBJ. 2 ElbaM ub 000,73 u Dawson and Willow McDonald formed a partnership, investing $276,000 and 000, respectively. Determine their participation in the year's net income of $380,000 er each of the following independent assumptions: (a) no agreement concerning sion of net income; (b) divided in the ratio of original capital investment; (c) inter- at the rate of 5% allowed on original investments and the remainder divided in the o of 2:3; (d) salary allowances of $47,000 and $59,000, respectively, and the balance ded equally; (e) allowance of interest at the rate of 5% on original investments, ry allowances of $47,000 and $59,000, respectively, and the remainder divided equally. SYOS 101 yllups esdmom to insmotete nie.smpont as to visinkvi 2-4 Dividing partnership income 619 OBJ. 2 g each of the five assumptions as to income division listed in Exercise 12-3, determine income participation of Dawson and McDonald if the year's net income is $136,000. itimba e-sr XX

Chapter 12 Accounting for Partnerships and Limited Liability Companies 2-3 Dividing partnership income OBJ. 2 ElbaM ub 000,73 u Dawson and Willow McDonald formed a partnership, investing $276,000 and 000, respectively. Determine their participation in the year's net income of $380,000 er each of the following independent assumptions: (a) no agreement concerning sion of net income; (b) divided in the ratio of original capital investment; (c) inter- at the rate of 5% allowed on original investments and the remainder divided in the o of 2:3; (d) salary allowances of $47,000 and $59,000, respectively, and the balance ded equally; (e) allowance of interest at the rate of 5% on original investments, ry allowances of $47,000 and $59,000, respectively, and the remainder divided equally. SYOS 101 yllups esdmom to insmotete nie.smpont as to visinkvi 2-4 Dividing partnership income 619 OBJ. 2 g each of the five assumptions as to income division listed in Exercise 12-3, determine income participation of Dawson and McDonald if the year's net income is $136,000. itimba e-sr XX

Individual Income Taxes

43rd Edition

ISBN:9780357109731

Author:Hoffman

Publisher:Hoffman

Chapter11: Investor Losses

Section: Chapter Questions

Problem 35P: LO.2 In the current year, Bill Parker (54 Oak Drive, St. Paul, MN 55164) is considering making an...

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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.
Thandie and Marco are partners with capital balances of $60,000. They share profits and losses at 50%. Chris contributes $30,000 to the partnership for a 1/3 share. What amount should Thandies capital balance in the partnership be? A. $60,000 B. $50,000 C. $45,000 D. $30,000
The partnership of Chase and Chloe shares profits and losses in a 70:30 ratio respectively after Chloe receives a $10,000 salary. Prepare a schedule showing how the profit and loss should be divided, assuming the profit or loss for the year is: A. $ 30,000 B. $ 6,000 C. ($10,000)
Thandie and Marco are partners with capital balances of $60,000. They share profits and losses at 50%. Chris contributes $90,000 to the partnership for a 1/3 share. What amount should the partnership record as an individual bonus to each of the old partners? A. $10,000 B. $7,000 C. $3,000 D. $20,000
The partnership of Tatum and Brook shares profits and losses in a 60:40 ratio respectively after Tatum receives a 10,000 salary and Brook receives a 15,000 salary. Prepare a schedule showing how the profit and loss should be divided, assuming the profit or loss for the year is: A. $40,000 B. $25,000 C. ($5,000) In addition, show the resulting entries to each partners capital account. Tatums capital account balance is $50,000 and Brooks is $60,000.
Thandie and Marco are partners with capital balances of $60,000. They share profits and losses at 50% each. Chris contributes $30,000 to the partnership for a 1/3 share. What amount should the partnership record as a bonus to Chris? A. $20,000 B. $15,000 C. $10.500 D. $5,000
The total capital balance after partnership remain same 7,500,000 (3,000,000 + 4,500,000). The total capital balance after partnership remain same 7,500,000 (3,000,000 + 4,500,000). So total capital balance of partnership after admission by marshall is 7,500,000. Capital share of marshall will be = (7,500,000/3) = 25,00,000. Percentage of marshall share in company's profit = (1/3*100) = 33.33%. REQUIRED: 1. What is the combined gain realized by Manuel and Marcus upon the sale of a portion of their interest in the partnership? A. 400,000 B. 300,000 C. 200,000 D. 100,000 E. not given 2. What is the gain realized by Manuel upon the sale of a portion of his interest in the partnership to Marshall? A. 130,000 B. 110,000 C. 100,000 D. 80,000 E. not given 3. What is the gain realized by Marcus upon the sale of a portion…
Jun Jon and Company, general co-partnership has the following data of income and expenses for 2018: Gross income- P 2,400,000 Expenses- 1,000,000 Dividend received from a domestic corporation 90,000 Interest on bank deposit (net)- 10,000 Partners Jun share profits and losses in the ratio of 80% and 20%, respectively. The income tax payable by the partnership is a. P420,000 b. P450,000 c. P447, 000 d. P423,000
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?
6. The following balances have been taken from the balance sheet of a partnership firm as atDec. 31, 2020:Debit Balances:Cash Rs. 325,000, Accounts Receivable Rs. 300,000, Merchandise Inventory Rs. 575,000,Furniture Rs. 300,000Credit Balances:Allowance for bad debt Rs. 30,000, Allowance for depreciation-Furniture Rs. 120,000, AccountsPayable Rs. 50,000, X Capital Rs.500,000, Y Capital Rs. 600,000, Z Capital Rs. 200,000 The partners were sharing profit and loss in their capital ratio. On the mentioned date theydecided to liquidate the partnership firm and the following transactions were performed:a. Rs. 250,000 was collected as full and final settlement of accounts receivable.b. Merchandise inventory was sold for Rs. 500,000 cash.c. Furniture was sold for cash Rs. 145,000d. Accounts Payable was fully paid.e. Loss on liquidation was distributed among the partners.f. Final Settlement to the partners was made.Required:Record the above transactions in General Journal
57 On December 31, 20x20, the Statement of Financial Position of ABC Partnership with profit or loss ratio of 6:1:3 of partners A, B and C respectively, revealed the following data: Cash P1,000,000 Other liabilities P2,000,000 Receivable from A 500,000 Payable to B 1,000,000 Other noncash assets 2,000,000 Payable to C 100,000 A, Capital 700,000 B, Capital (650,000) C, Capital 350,000 On January 1, 20x21, the partners decided to liquidate the partnership. All partners are legally declared to be personally insolvent. The other noncash assets are sold for P1,500,000. Liquidation expenses amounting to P100,000 were incurred. How much cash was received by C at the end of partnership liquidation?
A partnership has the following capital balances: Henry (50% of gains and losses) . . . . . . . . . . . . $ 135,000Thomas (30%) . . . . . . . . . . . .. . 85,000Catherine (20%) . . . . . . . . . . . . 80,000 Anne is going to invest $125,000 into the business to acquire a 40 percent ownership interest. Goodwill is to be recorded. What will be Anne’s beginning capital balance? Choose the correct. a. $125,000b. $170,000c. $200,000d. $245,000