Question
In: Accounting
Formation of partnership Assume that two individuals agree to form a partnership. Partner A is contributing...
Formation of partnership
Assume that two individuals agree to form a partnership. Partner A
is contributing an operating business that reports the following
balance sheet:
| Cash | $7,500 | Accounts payable | $22,500 | |
| Receivables | 15,000 | Accrued liabilities | 15,000 | |
| Inventories | 30,000 | Total liabilities | $37,500 | |
| Total assets | $52,500 | Net assets | $15,000 |
Partner B is contributing cash of $37,500. The partners agree that the initial capital of the partnership should be shared equally. Prepare the journal entry to record the capital contributions of the partners using both the Bonus Method and the Goodwill Method.
Solutions
ekkarill92 answered 1 year agoRelated Solutions
A, B and C, three individuals, form a general partnership by contributing the following property in...
A, B and C, three individuals, form a general partnership by
contributing the following property in exchange for equal 1/3
interests in the partnership’s capital, profits, and losses: A
contributes land, a capital asset that A acquired several years
ago, worth $100 in which A has a tax basis of $40. B contributes
machinery with a basis of $25 and a value of $60, plus $40 in cash.
B purchased the machinery several years ago for $75 and has taken...
When two or more individuals come together to form a partnership, the assets that they bring...
When two or more individuals come together to form a partnership,
the assets that they bring with them into the partnership may be
disproportionate. In this event, the assignment of capital may be
based on the bonus method or the
goodwill method. Please compare and contrast these
methodologies in the formation of a partnership. Feel free to use
examples.
Reminder: Your initial posting should be 250-500
words
When two or more individuals come together to form a partnership, the assets that they bring...
When two or more individuals come together to form a
partnership, the assets that they bring with them into the
partnership may be disproportionate. In this event, the assignment
of capital may be based on the bonus method or the goodwill
method.
Give an example of both the bonus method and goodwill
method.
When two or more individuals come together to form a partnership, the assets that they bring...
When two or more individuals come together to form a partnership,
the assets that they bring with them into the partnership may be
disproportionate. In this event, the assignment of capital may be
based on the
bonus
method or the
goodwill
method. Please compare and contrast these methodologies in the
formation of a partnership. Feel free to use examples.
Tom and Hank have decided to create a partnership, and both individuals will be contributing assets...
Tom and Hank have decided to create a partnership, and both
individuals will be contributing assets to the partnership. Tom has
contributed cash of $100,000, equipment with a fair market value of
$50,000, and a property worth $200,000, but that is encumbered by a
mortgage of $100,000. The partnership will assume the mortgage. Tom
has heard the terms of inside basis and outside basis. Please
analyze and discuss what the inside and outside basis would be for
Tom.
Discuss the tax implications for the different types of partnership transactions, such as partner-partnership, partner-partner, partner-external...
Discuss the tax implications for the different types of
partnership transactions, such as partner-partnership,
partner-partner, partner-external partner. How are gains and losses
allotted for each pass-through entity?
Which form of compensation is a partner entitled to receive from a partnership? A. Weekly salary...
Which form of compensation is a partner entitled to receive
from a partnership? A. Weekly salary for work performed.
B. Fair
market value for services rendered.
C. A share of partnership profits.
D. A reasonable management fee for
managing the business.
In Finch v. Raymer, the court ruled that the plaintiff
and defendant had formed a partnership to renovate real property
because:
A. Title to the real property was held
in the names of both parties.
B. Defendant had...
X, Y, and Z form the equal XYZ partnership by contributing $100,000 each, and purchasing some...
X, Y, and Z form the equal XYZ partnership by contributing
$100,000 each, and purchasing some equipment for $300,000. The
equipment has a depreciable life of five years, and all
depreciation (straight line) is allocated to X. Capital accounts
are properly maintained. Any distributions in liquidation will be
made according to the capital accounts of each partner. No partners
are required to restore deficit capital accounts upon liquidation,
but if partner X’s capital account ends up with a deficit balance,...
Anne, Bob, and John agree to form a partnership to own and operate The Riverside. Anne...
Anne, Bob, and John agree to form a partnership to own and
operate The Riverside. Anne and Bob will each contribute one-half
of the capital. Bob will contribute the real estate at a value of
$3 million. Anne will contribute the equipment and the restaurant
furnishings at a value of $1 million and the cost of improvement,
which amounts to $2 million. John will oversee the construction and
when complete, he will vest in a 5 percent interest in the...
1. a, b, and c agree to form a real estate investment partnership. they decide to...
1. a, b, and c agree to form a real estate investment
partnership. they decide to form an equal, cash-method, general
partnership, with each contributing property worth $300,000. A
contributes cash in that amount; B contributes raw land purchased
for $100,000 and held for two years; C contributes publicly traded
stock purchased for $400,000 and held for six months. The parties
anticipate a serious exploration of the real estate market and will
either hold the real estate and any subsequently...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- ***Convert the C++ to Python*** #include <iostream> using std::cout; using std::cin; using std::endl; int charClass; char...
- Make-or-Buy Decision Fremont Computer Company has been purchasing carrying cases for its portable computers at a...
- The following costs were incurred for the single product produced during the first year of operations...
- Non-constant growth model: Do=$2.00 required return on equity= 5% g= 9% n=1,2 g=7% n=3,4 g=3% n=5...
- . Find all x ∈ Z143 such that x2Ξ 7 (mod 143). Please explain all steps...
- #Python: A palindrome is a sequence of characters that reads the same backwards as forwards. For...
- Explain an example in which a variable has two different addresses at different places in a...
ADVERTISEMENT