Problem 5Brother and Sister are partners who are changing their profit and loss ratios from 60:40 to 45:55. At thedate of change, the partners choose to revaluate assets with market value different from their book values.One asset revalued is land with a book value of P500,000 and a market value of P1,200,000. Two yearsafter the profit and loss ratios are changed, the land is sold for P2,000,000.What is the amount of change in Sister’s capital account at the date the land is sold?A. 320,000 C. 600,000B. 440,000 D. 825,000
Problem 5Brother and Sister are partners who are changing their profit and loss ratios from 60:40 to 45:55. At thedate of change, the partners choose to revaluate assets with market value different from their book values.One asset revalued is land with a book value of P500,000 and a market value of P1,200,000. Two yearsafter the profit and loss ratios are changed, the land is sold for P2,000,000.What is the amount of change in Sister’s capital account at the date the land is sold?A. 320,000 C. 600,000B. 440,000 D. 825,000
SWFT Essntl Tax Individ/Bus Entities 2020
23rd Edition
ISBN:9780357391266
Author:Nellen
Publisher:Nellen
Chapter8: Property Transactions: Capital Gains And Losses, Section 1231 And Recapture Provisions
Section: Chapter Questions
Problem 18P
Related questions
Question
Problem 5Brother and Sister are partners who are changing their profit and loss ratios from 60:40 to 45:55. At thedate of change, the partners choose to revaluate assets with market value different from their book values.One asset revalued is land with a book value of P500,000 and a market value of P1,200,000. Two yearsafter the profit and loss ratios are changed, the land is sold for P2,000,000.What is the amount of change in Sister’s capital account at the date the land is sold?A. 320,000 C. 600,000B. 440,000 D. 825,000
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you