Abner and Bimbo have just formed partnership, Abner contributed cash of P2,346,000 and office equipment that cost P1,170,000. The equipment had been used in the sole proprietorship and had been 80% depreciated. The current fair value of the equipment is P756,000. An unpaid mortgage loan on the equipment of P252,000 will be assumed by the partnership. Abner is to have a 60% interest in the partnership net assets. Bimbo is to contribute only, merchandise with a fair value of P 1,890,000.

Abner and Bimbo have just formed partnership, Abner contributed cash of P2,346,000 and office equipment that cost P1,170,000. The equipment had been used in the sole proprietorship and had been 80% depreciated. The current fair value of the equipment is P756,000. An unpaid mortgage loan on the equipment of P252,000 will be assumed by the partnership. Abner is to have a 60% interest in the partnership net assets. Bimbo is to contribute only, merchandise with a fair value of P 1,890,000.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

. Aaron, Deanne, and Keon formed the Blue Bell General Partnership at the beginning of the current year. Aaron and Deanne each contributed $110,000 and Keon transferred an acre of undeveloped land to the partnership. The land had a tax basis of $70,000 and was appraised at $180,000. The land was also encumbered with a $70,000 nonrecourse mortgage for which no one was personally liable. All three partners agreed to split profits and losses equally. Blue Bell made a $7,000 principal payment on the mortgage at the end of the first year. For the first year of operations, the partnership records disclosed the following information: Sales revenue $ 470,000 Cost of goods sold $ 410,000 Operating expenses $ 70,000 Long-term capital gains $ 2,400 §1231 gains $ 900 Charitable contributions $ 300 Municipal bond interest $ 300 Salary paid as a guaranteed payment to Deanne (not included in expenses) $ 3,000 What is the Qualified nonrecourse debt for Deanne and why.
Lexi and Allie formed a partnership. Lexi received a 30% interest in partnership capital and profits in exchange for land with a basis of $50,000 and a fair market value of $90,000. Allie received a 70% interest in partnership capital and profits in exchange for $210,000 of cash. Three years after the contribution date, the land contributed by Lexi is sold by the partnership to a third party for $120,000. How much taxable gain will Lexi recognize from the sale?
Abner and Bimbo have just formed a partnership, Abner contributed cash of P2,346,000 and office equipment that cost P1,170,000. The equipment had been used in the sole proprietorship and had been 80% depreciated. The current fair value of the equipment is P756,000. An unpaid mortgage loan on the equipment of P252,000 will be assumed by the partnership. Abner is to have a 40% interest in the partnership net assets. Bimbo is to contribute only merchandise with a fair value of P1,890,000. Required: Use Bonus and Goodwill Method in computing the capital balances of Abner and Bimbo.
Please help me
Suzy contributed assets valued at $360,000 (basis of $200,000) in exchange for her 40% interest in Suz-Anna GP (a general part- nership in which both partners are active owners). Anna contributed land and a building valued at $640,000 (basis of $380,000) in exchange for the remaining 60% interest. Anna’s property was encumbered by qualified nonrecourse financing of $100,000, which was assumed by the partnership. The partnership reports the following income and expenses for the current tax year: Sales $560,000 Utilities, salaries, depreciation, and other operating expenses 360,000Short-term capital gain 10,000 Tax-exempt interest income 4,000 Charitable contributions (cash)…
Taylor and Tanner formed a partnership. Taylor contributed $50,000 in cash. Tanner contributed land and buildings he purchased for $50,000 some time ago. His tax basis in the property is now $30,000, although it was recently appraised for $70,000. There is a $15,000 mortgage attached to the building that the partnership will assume. What is the amount of Tanner’s capital account after his contribution? a. $50,000 b. $30,000 c. $35,000 d. $55,000
A, B and C are partners sharing profits in the ratio of 3:3:2. On June 30, their capital balances are as follows: A, 720, 000; B, 480, 000 and C, 360, 000. Dong will directly purchase 1/3 of A’s interest for 250, 000 and no bonus or goodwill is to be recognize before the direct purchase of A’s interest. In addition, Dong is also to invest 380, 000 cash in the partnership. The total capital of the partnership after the admission is to be 2, 000, 000. Dong’s interest after his admission by direct purchase and investment is to be 30%. c. What is the capital balance of A after the admission by direct purchase and admission by investment of Dong? d.What is the capital balance of B after the admission by direct purchase and admission by investment of Dong?
Liam & Reagan Company is a partnership that has two partners, Liam and Reagan. At the beginning of the year, Liam's basis in the partnership is $40,000 while Reagan's basis is $70,000. During the year, Liam transfers a building to the partnership. The building has an adjusted basis to Liam of $350,000 and a fair market value of $450,000. There is a recourse mortgage attached to the building of $250,000 that the partnership assumes. Liam's profit-sharing ratio is 40% and his loss sharing ratio is 30%. Reagan's profit-sharing ratio is 60% and her loss sharing ratio is 70%. What is Reagan's basis after this transaction?
On January 1, 2021 David contributed $25,000 cash and building with a basis of $100,000 and a FMV of $165,000 in exchange for 50% interest in partnership XYZ LLC. XYZ had the following activty for 2021: Ordinary Income: $140,000 Operating expenses: $60,000 Interest Income: $10,000 Nondeductible Expenses: 5,000 What is David's outside basis in XYZ LLC on December 31, 2021? 232,500 170,000 167,500 210,000
On July 1, 2019, Olga, Mega and Giga formed the OMG Partnership, by combining their separate business proprietorships. Olga contributed cash of P150,000. Mega contributed property with a carrying amount of P108,000, original cost of P120,000. and a fair value of P240,000. The partnership accepted responsibility for the P105,000 mortgage attached to the property. Giga contributed equipment with a carrying amount of P90,000, original cost of P225,000 and fair market value of P165,000. The partnership agreement specifies that profits and losses are to be shared equally. How much is the investment of Mega? Using the information in no. 2, and assuming capital are based on their profit and loss agreement, how much is the implied bonus? *