Question 23, P1-1 (similar to)Part 1 of 4Liability comparisons Nerissa Smith has invested $25,000 in Northeast Productions Company. The firm has recently declared bankruptcy and has $60,000 in unpaid debts. Explain the nature of Nerissa's personal liabilit , if any, in each of the following situations.a. Northeast Productions Company is a sole proprietorship owned by Ms. Smith.b. Northeast Productions Company is a 50-50 general partnership of Nerissa Smith and Roger Brown.c. Northeast Productions Company is a limited partnership where Nerissa Smith is a limited partner.d. Northeast Productions Company is a corporation.a. If Northeast Productions Company is a sole proprietorship owned by Ms. Smith,: (Select the best answer below.)O A. Ms. Smith has unlimited liability, which means creditors can only claim against the $25,000 she invested.O B. Ms. Smith has unlimited liability, which means creditors can claim against her personal assets.O C. Ms. Smith has limited liability, which is the amount of $60,000 in unpaid debts.D. Ms. Smith has limited liability, which guarantees that she cannot lose more than the $25,000 she invested.

In case of proprietorship, A sole proprietor will be responsible for all the costs and debts of…

Answered: a. If Northeast Productions Company is…

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter19: Corporations: Distributions Not In Complete Liquidation

Section: Chapter Questions

Problem 1RP

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NOTE: These are MCQS MCQS 11In which type of a business, the owner and his business are not considered same in the eyes of law?(a) Sole proprietorship(b) Limited companies(c) Partnership(d) a and c MCQS 12Which of the following liabilities would most likely be listed last on a statement of financial position?A)Bonds payable, due in 20 years.B)Accounts payable.C)Note payable, due in 3 years.D)Income taxes payable. MCQS 13Sales Gross Profit = __A)Cost of Goods SoldB)Net SalesC)Cost of Goods Available for SaleD)Gross Sales MCQS 14Land is purchased for $456,000. Additional costs include a $30,300 fee to a broker, a survey fee of $3,400, $2,750 to construct a fence, and a legal fee of $12,500. What is the cost of the land?A. $456,000.B. $486,300.C. $502,200.D. $504,950. MCQS 15Which of the following transactions occurs on daily basis in a large business organization?(a) Purchaser of equipment(b) Payroll(c) Credit sales(d) Payment of suppliers MCQS 16Prepaid expenses are assets that…
Liability comparisons Nerissa Smith has invested $25,000 in Northeast Productions Company. The firm has recently declared bankruptcy and has $60,000 in unpaid debts. Explain the nature of Nerissa's personal liabilit , if any, in each of the following situations. a. Northeast Productions Company is a sole proprietorship owned by Ms. Smith. b. Northeast Productions Company is a 50-50 general partnership of Nerissa Smith and Roger Brown. c. Northeast Productions Company is a limited partnership where Nerissa Smith is a limited partner. d. Northeast Productions Company is a corporation. 1) If Northeast Productions Company is a 50-50 partnership of Nerissa Smith and Roger Brown,: (Select the best answer below.) A.Ms. Smith has unlimited liability, which means creditors can only claim against the $25,000 she invested. B.Ms. Smith has limited liability, which is $30,000, or half of the $60,000 in unpaid debts. C.Ms. Smith has unlimited liability, which means creditors…
Problems 15 and 16 are independent problems based on the following capital account balances: Darrow invests $250,000 in cash for a 30 percent ownership interest. The money goes to the business. No goodwill or other revaluation is to be recorded. After the transaction, what is Jennings’s capital balance? $160,000 $168,000 $170,200 $171,200
Problem #1 The following are the capital accounts of the partners in the Marisol Stores on June 20, 2019: Capital Balance P/L Ratio Marisol P1,296,000 1/2 Nenita 864,000 2/5 Orang 540,000 1/10 On July 1, 2019, Pepita invest P510,480 in the business for a 1/6 interest in net assets and profits. Required: Two alternative solutions, in journal entry form, to record Pepita’s admission in the firm. Two alternative journal entries to record Pepita’s admission if instead of investing, she purchases a 1/6 interest ratably from all partners
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Question # 01:A business owned by Cristiano Ronaldo was short of cash and Ronaldo therefore decided to form a Partnership with Lionel Messi, who was able to contribute cash to the new partnership. The assets contributed by Ronaldo appeared as follows in the balance sheet of her business: cash $600: account receivable, $34900, with an allowance for doubtful accounts of $960: inventory $45600: and store equipment, $21600. Ronaldo had recorded depreciation of $1800 during his use of the store equipment in his sole proprietorship.Ronaldo and Messi agreed that the allowance for Doubtful accounts was in adequate and should be $1800.They also agreed that a fair value for the inventory was its replacement cost of $54000 and that the fair value of the store equipment was $19000.You are required to open the partnership accounts by making a general journal entry to record the investment by Ronaldo?
6 Jeremy and Patricia are a married couple that want to purchase a bakery franchise. profit for the franchise last year was $1 million. They are considering purchasing the business as a partnership or through a proprietary limited company. What id s downside of incorporation in these circumstances? Perpetual succession. A separate legal entity for contracts. Compliance and reporting obligations and on-going registration fees. Limited liability for members of the company
Question 1 Mary, Jane and Susan are in partnership sharing profits and losses in the ratio 2:2:1 respectively. The following was their balance sheet as at 31 December 2018: Cost Depreciation. NBV Non-Current Assets $ $ $ Premises 42,000 32,000 10,000 Motor Vehicles 14,000 10,000 4,000 Furniture and Fittings 6,000 2,000 4,000 Current Assets 62,000 44,000 18,000 Inventory 24,000 Trade Receivables 6,800 30,800 Capital and Liabilities 48,800 Capitals: Mary 7,000…
Accounting A, B and C had capital balance of : A,$150,000; B, 120,000 and C, 200,000, profit sharing ratio: 1:2:3. A decides to retire. A is paid 180,000 and goodwill of all partners is recorded (Problem 5 related) what will be the balance in the Capital Account of B after A’s retirement? (Problem 5 related) what will be the balance in the Capital Account of C after A’s retirement? (Problem 5 related) true or false in the journal entry of A’s retirement, the goodwill account will be debited with $ 30,000.
55)Grounds for Divorce Coffee Corporation had sales of $3 million this past year. Its cost ofgoods sold was $1.1 million and its operating expenses were $400,000. Interest expenseson outstanding debts were $160,000, and the company paid $40,000 in preferred stockdividends. The company received interest income of $14,000. Determine Grounds’taxable income.
F. The partnership of Anthony and Davis had an unprofitable year and agreed to liquidate their business on December 31, 2019. The Statement of Financial Position as of December 31, 2019 is presented below: A S S E T S Cash P 1,000 Accounts Receivable P 80,000 Less Allowance for Bad Debts 20,000 60,000 Merchandise Inventory 50,000 Prepaid Advertising 2,000 Office Equipment P 100,000 Less Accumulated Depreciation 60,000 40.000 TOTAL ASSETS P 153,000 LIABILITIES AND EQUITY Accounts Payable P 20,000 Notes Payable (due October 31, 2020) 86,000 Anthony, Capital 30,000 Davis, Capital 17,000 TOTAL…
E 6-1 General Questions Use the following information in answering questions 1 and 2: Pop Company sells land with a book value of $5,000 to Son Company for $6,000 in 2016. Son is a wholly owned subsidiary of Pop. Son Company holds the land during 2017. Son Company sells the land for $8,000 to an outside entity in 2018. In 2016 the unrealized gain: To be eliminated is affected by the noncontrolling interest percentage Is initially included in Son’s accounts and must be eliminated from Pop Company’s income from Son Company under the equity method Is eliminated from consolidated net income by a workpaper entry that includes a credit to the land account for $1,000 Is eliminated from consolidated net income by a workpaper entry that includes a credit to the land account for $6,000

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