FINANCIAL ACCT-CONNECT
8th Edition
ISBN: 9781266627903
Author: Wild
Publisher: INTER MCG
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George, Burton, and Dillman have been partners for three years. The partnership is being dissolved. George is leaving the firm, but Burton and Dillman plan to carry on the business. In the final settlement, George places a $75,000 salary claim against the partnership. He contends that he has a claim for a salary of $25,000 for each year because he devoted all of his time for three years to the affairs of the partnership. Is his claim valid? Why or why not?
Ray and Carin are partners in an accounting firm. The partners have entered into an arm's length agreement requiring Ray to purchase Carin's partnership interest from Carin's estate if she dies before Ray. The price is set at 120% of the book value of Carin's partnership interest at the time of her death. Ray purchased an insurance policy on Carin's life to fund this agreement. After Ray had paid $45,000 in premiums, Carin was killed in an automobile accident and Ray collected $800,000 of life insurance proceeds. Ray used the life insurance proceeds to purchase Carin's partnership interest.
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a. What amount should Ray include in his gross income from receiving the life insurance proceeds?
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b. The insurance company paid Ray $16,000 interest on the life insurance proceeds during the period Carin's estate was in administration. During this period, Ray had left the insurance proceeds with the insurance company. Is this…
Lauren, Matthew, and Susan form a partnership, with Lauren contributing $100,000, Matthew contributing $50,000, and Susan contributing her time and skill. Nothing is said regarding the division of profits. The firm later dissolves. No distributions to partners have been made since the partnership was formed. The partnership sells its assets for a loss of $90,000. After payment of all firm debts, $60,000 is left. Lauren claims that she is entitled to the entire $60,000. Matthew contends that the distribution should be $40,000 to Lauren and $20,000 to Matthew. Susan claims the $60,000 should be divided equally among the partners. Who is correct? Explain.
Chapter D Solutions
FINANCIAL ACCT-CONNECT
Ch. D - Prob. 1DQCh. D - Prob. 2DQCh. D - Prob. 3DQCh. D - Prob. 4DQCh. D - Prob. 5DQCh. D - Prob. 6DQCh. D - Prob. 7DQCh. D - Prob. 8DQCh. D - Prob. 9DQCh. D - Prob. 10DQ
Ch. D - Prob. 11DQCh. D - Prob. 12DQCh. D - Prob. 1QSCh. D - Prob. 2QSCh. D - Prob. 3QSCh. D - Prob. 4QSCh. D - Prob. 5QSCh. D - Prob. 6QSCh. D - Prob. 7QSCh. D - Prob. 8QSCh. D - Prob. 1ECh. D - Prob. 2ECh. D - Prob. 3ECh. D - Prob. 4ECh. D - Prob. 5ECh. D - Prob. 6ECh. D - Prob. 7ECh. D - Prob. 8ECh. D - Prob. 9ECh. D - Prob. 10ECh. D - Prob. 11ECh. D - Prob. 12ECh. D - Prob. 1PSACh. D - Prob. 2PSACh. D - Prob. 3PSACh. D - Prob. 4PSACh. D - Prob. 5PSACh. D - Prob. 1PSBCh. D - Prob. 2PSBCh. D - Prob. 3PSBCh. D - Prob. 5PSBCh. D - Prob. 3BTN
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