None Investments by partners2. Total assets $56 mil.Exercise 12-3Jackson Cooke and Julia Bamber are forming a partnership to develop an amusement parknear Ottawa. Cooke contributes cash of $3 million and land valued at $30 million. WhenCooke purchased the land, its cost was $16 million. The partnership will assume Cooke's$6 million note payable on the land. Bamber invests cash of $15 million and construc-tion equipment that she purchased for $14 million (accumulated amortization to date,$6 million). The equipment's market value is equal to its book value.Required1. Journalize the partnership's receipt of assets and liabilities from Cooke and from Bamber.Record each asset at its current market value with no entry to accumulated amortization.2. Compute the partnership's total assets, total liabilities, and total owners' equity imme-diately after organizing.

The formation of a partnership involves the contribution of assets and liabilities by the partners,…

Answered: Investments by partners 2. Total assets…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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EXERCISE 6. Journal Entries - Capital share different from capital contribution. On June 1, 2022, Al and Ace formed a partnership. Al contributed cash of P600,000, inventories of P100,000, and furniture and fixtures of P120,000. On the other hand, Ace contributed cash of P520,000, building of P330,000, and land of P200,000. The building was mortgaged for a loan amounting to P500,000 of which 70% had already been paid. The remaining balance would be assumed by the partnership. The partners agreed to share profits and losses equally. Prepare and upload journal entries related to partnership formation, assuming: 1. Each partner would be credited for the full amount of net assets invested 2. Each partner initially should have equal interest in partnership capital. To ensure this, it was agreed that partner with a lower capital balance had to invest additional cash.
On April 1, 2022, Guy Comeau and Amelie Lavoi formed a partnership in Ontario. Comeau Lavoi Contribution $304,000 cash $202,000 land $144,900 building Profit sharing $184,800 salary allowance 5% of original capital investments 5% of original capital investments 40% of remaining 60% of remaining Cash withdrawal March 20, 2023 $129,800 Net Income during the year was $509,600 and was in the Income Summary account.On April 1, 2023 Travis Roberts invested $139,400 and was admitted to the partnership for a 20% interest in equity.Required:1. Prepare journal entries for the following dates.a. April 1, 2022
On March 1, 20x4, CC and FF formed a partnership with each contributing the following assets: CC FF Cash... P 30,000 P70,000 Machinery. 25,000 75,000 Building.. 225,000 ******* Furniture and fixtures... 10,000 The building is subject to a mortgage loan of P90,000, which is to be assumed by the partnership agreement provides that CC and FF share profits and losses 30 percent and 70 percent, respectively. On March 1, 20x4, the capital account of FF would showa balance of:
EXERCISE 4. Journal Entries - Cash, non-cash, and industry contributions. Prepare and upload the journal entries to record contributions of Kim and Krislam into the partnership under the following independent assumptions: 1. Cash contribution amounting to $45,000 each. 2. Kim contributed $35,000 cash and a store equipment with carrying value of $27,000. Krislam contributed $15,000 cash and a delivery vehicle with a fair market value of $195,000. Kim and Krislam agreed that each depreciable asset is overvalued by $4,000. 3. Kim contributed $10,000 cash and furniture and fixtures with carrying value of $32,000. Krislam contributed $5,000 cash and a building with a fair market value of $295,000 and an unpaid mortgage of $27,500. Kim and Krislam agreed that building is undervalued by $9,000. 4. Kim contributed $25,000 cash, a store equipment with fair market value of $47,000, and delivery vehicle with a fair market value of $175,000. Krislam, an industrial partner, was to contribute her…
EXERCISE 8-10. Problem Solving 2: Gain or loss on realization of non-cash assets; capital deficiency absorption. Joshua, Daniel, and Martha were partners sharing profit and losses in the ratio of 1:2:1, respectively. On March 15, 2019, they decided to liquidate. Capital balances of Joshua, Daniel, and Martha were P215,000, P75,000, and P85,000, respectively. Liabilities amounting to P100,000 had yet to be settled. Total assets, inclusive of P35,000 cash, totaled P475,000. All non-cash assets were sold for only 30% of their book values. Liquidating expenses of P5,000 were also incurred. It was also determined that all partners, except Daniel, were solvent. REQUIRED: 1. How much was the gain or loss on non-cash asset realization? 2. How much cash should Martha infuse to satisfy the liquidation process of the partnership?
EXERCISE 7-8. Problem Solving 2: Admission by investment of assets. The beginning capital balances of Bangon (60%) and Pilipinas (40%) in the partnership are P300,000 and P200,000, respectively. They agreed to admit Pag-asa as a new partner to contribute cash of P300,000 for a capital balance of P250,000 representing 25% of profit and loss ratio and 25% of total capital of the new partnership. They agreed that the value of the existing land of the partnership would be adjusted for the difference between the agreed capital and the total contributed capital but up to P100,000 only. The remaining balance would be paid in cash by existing partners to make their respective agreed capital balances consistent with the new profit and loss ratio. REQUIRED: 1. Compute the share of Pilipinas in the agreed capital. 2. Determine the new profit and loss ratio. 3. Compute the cash contribution that Bangon and Pilipinas would each make.
E13-2 Accounting for partner investments [10 min] Nan Ferdinand has been operating a student apartment-locator service as a proprietorship. She and Misti Morris have decided to form a partnership. Ferdinand's investment consists of cash, $6000; accounts receivable, $13000; office furniture, $15 000; a building, $51000; and a loan payable to the bank, $22000. To determine Nan's equity in the partnership, she and Misti hire an independent valuer. He values all the assets and liabilities at their carrying amount except the building, which has a current market value of $96000. Also, there are additional accounts payable of $5 000 that Nan will contribute. Misti will contribute cash equal to Nan's equity in the partnership. Requirements 1 Journalise the entry on the partnership books to record Nan's investment. 2 Journalise the entry on the partnership books to record Misti's investment.
Question #2: Toto profit 56,000 The ABCD Partnership has the following balance sheet at January 1, 2012, prior to the admission of new partner, Eden. Cash and current assets Land Building and equipment Total $ 39,000 234,000 130,000 $ 403,000 Liabilities Adams, capital Barnes, capital Cordas, capital Davis, capital Total $ 52,000 26,000 52,000 117,000 156,000 $ 403,000 Eden contributed $124,000 in cash to the business to receive a 20% interest in the partnership. Goodwill was to be recorded. The four original partners shared all profits and losses equally. After Eden made his investment, what were the individual capital balances?
Property C has two partners, Operator and Finance Property C has a single tenant and NOI of $15 million in year one. The building is purchased for cash at a cap rate of 6%. The operator invests 15% of the purchase price and finance partner invests the remainder. From any operating cash flow, the partners agree that the finance partner will have a preferred payout of 6%, simple interest. The operator will then receive 6% from operating cash flow. If there is any excess cash flow it will be held as a reserve to fund any operating deficits or capital needs. If a reserve still exists at the end of the transaction it will be added to the sales proceeds and distributed. Upon sale, the finance partner receives a preferred return of all invested capital and 6% annual, simple interest, to the extent it has not yet been paid. Next, the operating partner receives a return of all invested capital and 6% annual, simple interest, to the extent it has not yet been paid. The operating partner then…
Property C has two partners, Operator and Finance Property C has a single tenant and NOI of $15 million in year one. The building is purchased for cash at a cap rate of 6%. The operator invests 15% of the purchase price and finance partner invests the remainder. From any operating cash flow, the partners agree that the finance partner will have a preferred payout of 6%, simple interest. The operator will then receive 6% from operating cash flow. If there is any excess cash flow it will be held as a reserve to fund any operating deficits or capital needs. If a reserve still exists at the end of the transaction it will be added to the sales proceeds and distributed. Upon sale, the finance partner receives a preferred return of all invested capital and 6% annual, simple interest, to the extent it has not yet been paid. Next, the operating partner receives a return of all invested capital and 6% annual, simple interest, to the extent it has not yet been paid. The operating partner then…
Property C has two partners, Operator and Finance Property C has a single tenant and NOI of $15 million in year one. The building is purchased for cash at a cap rate of 6%. The operator invests 15% of the purchase price and finance partner invests the remainder. From any operating cash flow, the partners agree that the finance partner will have a preferred payout of 6%, simple interest. The operator will then receive 6% from operating cash flow. If there is any excess cash flow it will be held as a reserve to fund any operating deficits or capital needs. If a reserve still exists at the end of the transaction it will be added to the sales proceeds and distributed. Upon sale, the finance partner receives a preferred return of all invested capital and 6% annual, simple interest, to the extent it has not yet been paid. Next, the operating partner receives a return of all invested capital and 6% annual, simple interest, to the extent it has not yet been paid. The operating partner then…
Problem 1: On January 1, 20x1, Rody and Noy formed a partnership. Rody and Noy contributed the following assets at formation: Rody Noy Cash 25,000 37,500 Inventory 18,750 Building 50,000 Equipment 18,750 The building is subject to a P12,500 mortgage, which was assumed by the partnership. They share profit and loss in the ratio of 60:40. Assuming Rody will invest (withdraw) cash so that his capital balance will equal to his profit and loss ratio, what is the total asset of the partnership after formation? (The correct answer is 246,875 but I need a solution/explanation)

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