Hook, Line and Floater have continued trading for a further year and they are considering admitting Sinker
Q: Hook, Line and Floater have continued trading for a further year and they are considering admitting…
A: Solution- Goodwill= value of business-net asset value =$750000-$375000 =…
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Hook, Line and Floater have continued trading for a further year and they are considering admitting Sinker
on 31 December 20X9. For the purposes of calculating
business as if it were to be sold on 31 December 20X9. This valuation is $750,000. The
financial position at 31 December 20X9 shows net assets of $375,000. Calculate goodwill.
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- Hook, Line and Floater have continued trading for a further year and they are considering admitting Sinkeron 31 December 20X9. For the purposes of calculating goodwill, the partners obtain a valuation of thebusiness as if it were to be sold on 31 December 20X9. This valuation is $750,000. The statement offinancial position at 31 December 20X9 shows net assets of $375,000. Calculate goodwill. Please i want the solution real fastThe Partnership of Rose and Dailine is being dissolved, and the assets and equities at book value and fair value and profit and loss ratios at January 1, 2021 are as follows:Book Value Fair ValueCash P20,000 P20,000Accounts Receivables – net 100,000 100,000 Inventories 50,000 200,000Plant Assets – net 100,000 120,000P270,000 P440,000Accounts Payable P50,000 P50,000Rose, Capital 120,000Dailine, Capital 100,000P270,000 Rose and Dailine agreed to admit Janyla into the partnership for one-third interest. Janyla invests P95,000 cash and a building to be used in the business with a book value to Janyla for P100,000 and a fair value of P120,000.Compute the capital balance of Dailine after the admission assuming that the assets are revalued and goodwill is recognized.a. P175,000 c. P195,000b. 155,000 D. 205,000On October 1, A and B pooled their assets to form a Partnership, with the firm to take over the business assets and assume liabilities. Partners capitals are to be based on net assets transferred after the following adjustments. The partners agreed to the following adjustments: A’s inventory is to be increased by P15,000, while B’s inventory has a current fair market value of P100,000 and an agreed value of P110,000. B’s unadjusted inventory amounted to P90,000. Machinery and equipment are over-depreciated by P5,000 and P8,000 for A and B, respectively. Furnitures and fixtures for partner A has a current fair market value of P60,000 and an agreed value of P50,000. Furnitures and fixtures is carried at its cost amounting to P100,000 with accumulated depreciation of P45,000. Accrued rent income of P10,000 for A, and accrued salaries of P5,000 for B should be recognized on their respective books. The individual trial balances on October 1, before adjustments, follow: DESCRIPTION A…
- On October 1, Ara and Ben pooled their assets to form a Partnership, with the firm to take over the business assets and assume liabilities. Partners capitals are to be based on net assets transferred after the following adjustments. The partners agreed to the following adjustments: Ara's inventory is to be increased by 15,000, while Ben's inventory has a current fair market value of 100,000 and an agreed value of 110,000. Ben's unadjusted inventory amounted to 90,000. Machinery and equipment are over-depreciated by 5,000 and 8,000 for Ara and Ben, respectively. Furnitures and fixtures for Ara has a current fair market value of 60,000 and an agreed value of 50,000. Furnitures and fixtures is carried at its cost amount to 100,000 with accumulated depreciation of 45,000. Accrued rent income of 10,000 for Ara and accrued salaries of 5,000 for Ben should be recognized on their respective books. The individual trial balances on October 1, before adjustments, follow: DESCRIPTION Ara Ben…Immediately prior to the admission of Abbott, the Smith-Jones Partnership determines that equipment that cost $20,000, with accumulated depreciation of $5,000, has a current market value of $12,000. Assuming an asset revaluation account is used, the journal entry to revalue the equipment will include a.a credit to Accumulated Depreciation of $3,000 b.a debit to Asset Revaluation of $3,000 c.a debit to Asset Revaluation of $12,000 d.a credit to Equipment of $3,000If the partners opted to continue the books of the sole proprietor and the Merchandise inventory has a balance per books of P330,000 but the agreed value is P350.000, the adjustment would be
- Use the following information for the next two questions:On December 29, 20x2 (trade date), Jared Co. enters into a contract to sell a financial asset for its current fair value of ₱4,040 to Hera Co. The asset was acquired one year earlier for ₱4,000 and its carrying amount on December 29, 20x2 is ₱4,000. On December 31, 20x2 (financial year-end), the fair value of the asset is ₱4,024. On January 4, 20x3 (settlement date), the fair value is ₱4,052. 1. If the financial asset sold was classified as held for trading security and the sale is accounted for under the trade date accounting, the entry on December 29, 20x2 in Jared’s books will includea. a ₱4,000 credit to the “Held for trading securities” account.b. a ₱40 debit to unrealized gain.c. a ₱4,000 debit to a receivable account.d. No entry will be made on this date. 2. If the financial asset sold was classified as held for trading security and the sale is accounted for under the settlement date accounting, the entry on December 29,…On July 1, 20X2, Cua, Wicas, and Suico organized a partnership. Wicas contributed cash amounting to P600,000 and Suico contributed cash of P300,000 and machinery with a carrying amount of P250,000, the historical cost of P600,000, and market value of P475,000. Cua, on the other hand, was admitted to the partnership for the services that she will provide. It was stipulated in the Articles of the Partnership that Cua, Wicas, and Suico will share the profit and loss in the ratio of 3:5:2. Moreover, it was also stipulated that when Cua and Wicas become personally insolvent upon winding up, Suico will also absorb the loss of the partnership. Are the stipulations valid? Justify your answer in no more than five (5) sentences.On June 30, 2009, the balance sheets of the partnership of AAA, BBB and CCC, together with their respective profit and loss ratios, were as follows: Assets, at cost P 180,000 AAA, loan P 9,000 AAA, capital (20%) 42,000 BBB. Capital (20%) 39,000 CCC , capital (60%) 90,000 Total P 180,000 AAA has decided to retire from the partnership. By mutual agreement, the…
- On March 1, 2018, X and Y formed a partnership. The partners contributed the following: (see attached image) 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 receivables 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 of Y has a fair value of P190,000.e. The note of X is dated December 1, 2017 and is subject to a 12% interest. Interest had not yet been accrued.f. The partners agree on a 2:1 profit and loss ratio.g. The partners agree to bring their capital balance proportionate to their profit and loss ratio.Requirement:1. If Y's Capital is to be used as basis, how much is the adjusted capital of X after the formation? 2. What is the total assets of the partnership immediately after the formation?3. If the goodwill method is to be used in determining the capital of each…M/s. Al Hilal LLC started with Capital OMR 800,000, Total Tangible Assets OMR 1,000,000 andCurrent Liabilities OMR 100,000 and decided to admit a new partner in the business and also toreceive the amount of goodwill from the incoming partner. The concern wishes to calculate thevalue of goodwill on the basis of four years purchase of the firm by different methods, such asAverage Profit and Super Profit. The books of accounts revealed some information related to pastyears’ profits of 2011 - OMR 15,000, 2012 - OMR 20,000, 2013 - OMR 25,000, 2014 - OMR 30,000,2015 - OMR 35,000, 2017 - OMR 40,000, 2018 - OMR 45,000, 2019 - OMR 50,000. The concernexpects the Rate of Return @ 12.5 % normally.Compute the value of goodwill on the basis of 4 years purchase under Capitalization of AverageProfit Method and Super Profit Method. Which method of goodwill calculation is beneficial forthe firm? Why these two methods showing two different values? Give your comments with thecalculated values.On January 1, 2031, A, B and C formed ABC Partnership with total agreed capitalization of P2,000,000. The capital interest ratio of the ABC Partnership is 5:1:4 while the profit or loss ratio is 3:2:5, respectively for A, B and C. During 2031, A and B made additional investments of P400,000 and P1,000,000, respectively. At the end of 2031, B and C made drawings of P600,000 and P200,000, respectively. On December 31, 2031, the capital balance of B is reported at P400,000. 7. What is the net income or net loss of ABC Partnership for the year ended December 31,2031?a. (P1,000,000)b. (P2,000,000)c. P1,600,000d. P2,400,0008. What is the capital balance of A on December 31, 2031?a. P900,000b. P700,000c. P1,100,000d. P800,0009. What is the capital balance of C on December 31, 2031?a. P300,000b. P100,000c. P400,000d. P500,000