5 Dewey, Huey, and Louie created the Sleepy Times partnership to sell pajamas. TheSleepy Times partnership has the following balance sheet:Unrealized receivablesInventoryLandCapital, DeweyCapital, HueyCapital, LouieBasis0120,00060,000$180,000$60,00060,00060,000$180,000FMV$30,000150,00090,000$270,000$90,00090,00090,000$270,000At his request, Dewey receives a distribution consisting of 14 of the unrealizedreceivables and 14 of the inventory, reducing his interest in the partnership from1/3 to 1/5. You are going to calculate the tax effects of this distribution toDewey and the partnership.Under 751(b), Dewey is first treated as having been distributed $A/ of land in a hypotheticaldistribution.Dewey's basis in the hypothetically distributed land is $A/Sleepy Times is treated as having bought back the land with $A of unrealized receivables and $A/

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 distribution 120,000 60,000 $180,000 $60,000 60,000 60,000 $180,000 FMV $30,000 150,000 90,000 $270,000 $90,000 90,000 90,000 $270,000 At his request, Dewey receives a distribution consisting of 14 of the unrealized receivables and ½4 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 $ A/ of land in a hypothetical

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 distribution 120,000 60,000 $180,000 $60,000 60,000 60,000 $180,000 FMV $30,000 150,000 90,000 $270,000 $90,000 90,000 90,000 $270,000 At his request, Dewey receives a distribution consisting of 14 of the unrealized receivables and ½4 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 $ A/ of land in a hypothetical

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 FMV $30,000 150,000 90,000 $270,000 4 $90,000 90,000 90,000 $270,000 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.
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…
pie 6TT UOI: Use the following account balance information for Granobfin Partnership with income ratios of 2:4:4 for Granger, Noble, and Finn, respectively. Assets Liabilities and Owner's Equity Cash $ 56300 Accounts payable $ 126100 Accounts Granger, Capital $138600 receivable 131500 Noble, Capital 48300 Inventory 437400 Finn, Capital 312200 $625200 $625200 Assume that, as part of liquidation proceedings, Granobfin sells its noncash assets for $509900. The amount of cash that would ultimately be distributed to Finn would be $288600. $312200. $512600. $203960.
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
Show the solution in good accounting form On March 1, 2018, X and Y formed a partnership. The partners contributed the following: X Y Cash P500,000 P400,000 Accounts Receivable 300,000 200,000 Allowance for doubtful accounts50,000 20,000 Inventory 150,000 100,000 Equipment 500,000 200,000 Accumulated depreciation 100,000 25,000 Accounts Payable 50,000 400,000 Note Payable 200,00 The 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 receivatbies of X and 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 ofY has a fair value of P190,000. E.…
Show the solution in good accounting form On March 1, 2018, X and Y formed a partnership. The partners contributed the following: X Y Cash P500,000 P400,000 Accounts Receivable 300,000 200,000 Allowance for doubtful accounts50,000 20,000 Inventory 150,000 100,000 Equipment 500,000 200,000 Accumulated depreciation 100,000 25,000 Accounts Payable 50,000 400,000 Note Payable 200,00 The 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 receivatbies of X and 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 ofY has a fair value of P190,000. E.…
Partners Abada and Albano agreed to combine their businesses into a partnership. The statement of financial position accounts of Abada and Albano are shown below. ABADA ALBANO Book Value Agreed Value Book Value Agreed Value Cash ₱ 50,000 ₱ 50,000 ₱ 70,000 ₱ 70,000 Accounts Receivable 460,000 460,000 490,000 490,000 Allowance for Uncollectible Accounts 30,000 40,000 40,000 50,000 Merchandise Inventory 900,000 1,080,000 720,000 750,000 Equipment 180,000 120,000 90,000 70,000 Accumulated Depreciation 36,000 ----- 9,000 ----- Furnitures and Fixtures 120,000 90,000 ----- ----- Accumulated Depreciation 24,000 ----- ----- ----- Accounts Payable 540,000 540,000 360,000 360,000 Instruction: Assuming that the partnership is to open new set of books, give the journal entries to record the investment of Abada and Albano.
. The XYZ partnership has the following balance sheet: and both have the same sharing rights. Basis FMV Land $66,000 $51,000 Accounts Receivable 0 15,000 Inventory 24,000 45,000 Collectibles 3,000 9,000 Total $93,000 $120,000 Liabilities $30,000 $30,000 Capital, X 21,000 30,000 Capital, Y 21,000 30,000 Capital, Z 21,000 30,000 Total $93,000 $120,000 a. If X sells her partnership interest to W for $30,000 cash, what is her gain or loss, and what is its character? b. What basis will W take in the partnership? c. If a Sec. 754 election is in place, what will the balance sheet look like after the transaction?
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…
Ariel, 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.ArielBeautyCash113126Accounts Receivables200100Inventories5050Equipment800Furniture030Prepayments515TOTAL448321Accounts Payable7595Capital373226TOTAL448321Partners' agreements:Receivables are 97% collectibleAriel's inventories fair values is at P49 while P20 of Beauty's Inventories were damaged and are only 30% recoverable.The equipment is overdepreciated by P5 and the furniture's value will decrease by P4.P3 of Ariel’s prepayments were already exhausted while Beauty has unrecorded liability of P3.Cindy will contribute sufficient cash to give her 20% interest1. How much capital will be credited to Ariel?2. How much capital will be credited to Beauty?3. How much capital will be credited to Cindy?4. How much is the total assets of the newly-formed partnership?
Ariel, 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.ArielBeautyCash113126Accounts Receivables200100Inventories5050Equipment800Furniture030Prepayments515TOTAL448321Accounts Payable7595Capital373226TOTAL448321Partners' agreements:Receivables are 97% collectibleAriel's inventories fair values is at P49 while P20 of Beauty's Inventories were damaged and are only 30% recoverable.The equipment is overdepreciated by P5 and the furniture's value will decrease by P4.P3 of Ariel’s prepayments were already exhausted while Beauty has unrecorded liability of P3.Cindy will contribute sufficient cash to give her 20% interest1. How much capital will be credited to Ariel?
Use the following account balance information for Granobfin Partnership with income ratios of 2:4:4 for Robert, Noble, and Finn, respectively. Cash Assets $50400 Accounts receivable 133000 Inventory O $286740. O $311100. O $204000. O $520500. 437900 $621300 Liabilities and Owner's Equity. Accounts payable $125200 Robert, Capital Noble, Capital Finn, Capital 137400 47600 311100 $621300 Assume that, as part of liquidation proceedings, Granobfin sells its noncash assets for $510000. The amount of cash that would ultimately be distributed to Finn would be