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 2 years agoRelated Solutions
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If a partner is contributing attributes to a partnership such as
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Provide examples of the journal entries you would use. Comment on
your classmates choices.
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,
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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...
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