Horngren's Accounting: The Managerial Chapters, Student Value Edition Plus Mylab Accounting With Pearson Etext - Access Card Package (12th Edition)
12th Edition
ISBN: 9780134643168
Author: MILLER-NOBLES, Tracie L.; Mattison, Brenda L.; Matsumura, Ella Mae
Publisher: PEARSON
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Textbook Question
Chapter 12, Problem 8QC
Peter and Steve admit Meredith to their partnership, with Meredith paying $70,000 more than the book value of her equity in the new business. Peter and Steve have no formal profit-and-loss-sharing agreement. What effect does admitting Meredith to the partnership have on the capital balances of Peter and Steve?
Learning Objective 4
- Credit the Peter and Steve capital accounts for $35,000 each.
- Cannot be determined because there’s no profit-and loss-sharing ratio.
- Debit the Peter and Steve capital accounts for $35,000 each.
- Credit the Peter and Steve capital accounts for $70,000 each.
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On January 1 , Ryan and James decided to open a Peruvian chicken restaurant ( yum ! ) . Ryan contributed the building and land for the restaurant that had a fair market value of $ 160,000 and adjusted tax basis of $ 150,000 for a 50 percent profits interest and capital interest . Ryan had a $ 60,000 business loan . James contributed $ 50,000 of cash for a 50 percent profits interest and capital interest . The new partnership relieves Ryan by taking on the loan . Should the partnership fail to pay the loan , the creditor is only able to claim potential future profits of the company but cannot go after the personal assets of either partner . The company uses a calendar year tax period . In the above scenario , what are Ryan and James's initial outside tax bases in the partnership ? OI . O II . Ryan : $ 150,000 . James : $ 50,000 . Ryan : $ 90,000 . James : $ 50,000 . O III . None of the answers given here . O IV . Ryan : $ 130,000 . James : $ 80,000 .
KATY, a sole proprietor wanted to expand her profitable business but she does not have enough resources. So, she thought of inviting PERRY to join her and formed a partnership on April 1, 2020. Just before admission, KATY had the following assets and liability accounts: Cash - ₱420,000; Accounts receivable -₱380,000; Inventories -₱250,000;Notes payable -₱100,000. PERRY agreed to contribute cash equal to 30% of KATY’s capital after considering the following adjustments: (a) 2% allowance for bad debts should be recognized, (b) the inventories have fair market value equal to 120% of the balance. How much should Perry contribute to the partnership?
KATY, a sole proprietor wanted to expand her profitable business but she does not have enough resources. So, she thought of inviting PERRY to join her and formed a partnership on April 1, 2020. Just before admission, KATY had the following assets and liability accounts:
Cash - ₱420,000;
Accounts receivable -₱380,000; Inventories -₱250,000;
Notes payable -₱100,000.
PERRY agreed to contribute cash equal to 30% of KATY’s capital after considering the following adjustments: (a) 2% allowance for bad debts should be recognized, (b) the inventories have fair market value equal to 120% of the balance.
How much is the total assets of the partnership after the formation? *
Chapter 12 Solutions
Horngren's Accounting: The Managerial Chapters, Student Value Edition Plus Mylab Accounting With Pearson Etext - Access Card Package (12th Edition)
Ch. 12 - Prob. 1QCCh. 12 - Prob. 2QCCh. 12 - Prob. 3QCCh. 12 - Which financial statement shows the changes in...Ch. 12 - Prob. 5QCCh. 12 - Prob. 6QCCh. 12 - Prob. 7QCCh. 12 - Peter and Steve admit Meredith to their...Ch. 12 - Prob. 9QCCh. 12 - Prob. 10QC
Ch. 12 - Prob. 1RQCh. 12 - Prob. 2RQCh. 12 - Prob. 3RQCh. 12 - Prob. 4RQCh. 12 - Prob. 5RQCh. 12 - Prob. 6RQCh. 12 - Prob. 7RQCh. 12 - Prob. 8RQCh. 12 - Prob. 9RQCh. 12 - Prob. 10RQCh. 12 - Prob. 11RQCh. 12 - Prob. 12RQCh. 12 - Prob. 13RQCh. 12 - Prob. 14RQCh. 12 - Prob. 15RQCh. 12 - What are the three steps involved in liquidation...Ch. 12 - Prob. 17RQCh. 12 - Prob. S12.1SECh. 12 - Prob. S12.2SECh. 12 - Prob. S12.3SECh. 12 - Prob. S12.4SECh. 12 - Prob. S12.5SECh. 12 - S12-6 Accounting for the admission of a new...Ch. 12 - Accounting for the admission of a new partner...Ch. 12 - Prob. S12.8SECh. 12 - Prob. S12.9SECh. 12 - Prob. S12.10SECh. 12 - Prob. S12.11SECh. 12 - Prob. S12.12SECh. 12 - Prob. E12.13ECh. 12 - Prob. E12.14ECh. 12 - Prob. E12.15ECh. 12 - Prob. E12.16ECh. 12 - Prob. E12.17ECh. 12 - Prob. E12.18ECh. 12 - Prob. E12.19ECh. 12 - Prob. E12.20ECh. 12 - Prob. E12.21ECh. 12 - Prob. E12.22ECh. 12 - Determining characteristics of a partnership and...Ch. 12 - Prob. P12.24APGACh. 12 - Prob. P12.25APGACh. 12 - Prob. P12.26APGACh. 12 - Prob. P12.27APGACh. 12 - Prob. P12.28APGACh. 12 - Prob. P12.29APGACh. 12 - Prob. P12.30APGACh. 12 - Prob. P12.31BPGBCh. 12 - Prob. P12.32BPGBCh. 12 - Prob. P12.33BPGBCh. 12 - Prob. P12.34BPGBCh. 12 - Prob. P12.35BPGBCh. 12 - Accounting for the liquidation of a partnership...Ch. 12 - Prob. P12.37BPGBCh. 12 - Prob. P12.38BPGBCh. 12 - Prob. P12.39CTCh. 12 - P12-40 Accounting for partner contributions,...Ch. 12 - Prob. 12.1TIATCCh. 12 - Prob. 12.1DCCh. 12 - Prob. 12.2DCCh. 12 - Prob. 12.1EICh. 12 - Prob. 12.1FSC
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