Jefferson has a capital balance of $65,000 and devotes full time to a partnership. Washington has a capital balance of $45,000 and devotes half time to the partnership. If no other information is available regarding distributions, how should net income be divided?
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Jefferson has a capital balance of $65,000 and devotes full time to a
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- LO.2, 4, 7, 8 Describe how a partnership reports its income for tax purposes. Who makes most elections related to partnership income and deductions? Compare the treatment of the business interest expense limitation versus the qualified business income deduction. What theories underly this treatment?Determine Julie's basis in her partnership interest and tax return effects. Also, determine Julie's basis in any property received as a distribution from the partnershipCarrie and Callie form a partnership in which Carrie contributes $85,000 in assets and agrees to devote half time to the partnership. Callie contributed $50,000 in assets and agrees to devote full time to the partnership. If no additional information is available, how will Carrie and Callie share in the division of income? In the ratio of:
- In the LP Partnership, Lulu and Popo had a capital ratio of 3:1 and a profit and loss ratio of 2:1, respectively. They used the bonus method to record Nova’s admission as a new partner. What ratio should be used to allocate to Lulu and Popo, the excess of Nova’s contribution over the amount credited to Nova’s capital account?The ABCD Partnership owns the following assets on December 30 of the current year: View the assets. View the additional information. Requirement What are the tax consequences of the distribution to the partnership, Alana, and the other partners? Start by completing a Sec. 751 nonliquidating distribution analysis. (If an input field is not used in the table or the balance is 0, leave the field empty; do not enter a zero. Round to the nearest dollar. Use a minus sign or parentheses in the Difference column if Alana gave up her interest in a particular property.) Sec. 751 assets: Total Sec. 751 assets Non-Sec. 751 assets: Total non-Sec. 751 assets Beginning Partnership Amount Alana's Interest Before Distribution (1/4) Alana's Interest After Hypothetical Distribution Proportionate (1/5) Distribution (…) Actual Distribution Difference Assets Assets Cash Receivables Inventory Total $ Partnership's Basis $ Additional Information 100,000 $ 0 77,000 177,000 $ FMV 100,000 36,000 110,000 246,000…P is allocated his distributive share of a partnership's ordinary income. The effect of this is: a. To decrease P's outside basis To increase b. P's inside basis C. To increase P's outside basis To trigger double d. taxation of those earnings
- Matthews, Williams, and Shen share equally in net income and net losses. After the partnership sells all assets for cash, divides the losses on realization, and pays the liabilities, the balances in the capital accounts are as follows: Matthews, $28,000 Cr.; Williams, $62,500 Cr.; Shen, $18,000 Dr. a. What term is applied to the debit balance in Shen’s capital account? b. What is the amount of cash on hand? c. Journalize the transaction that must take place for Matthews and Williams to receive cash in the liquidation process equal to their capital account balances. Liquidating partnerships— capital deficiencyBased on the above information, kindly answer the following: 1. In the profit distribution schedule, the salary allowance of Tom will be? 2. Of the P1,404,000 net profit of the partnership, the share of Rey will be? 3. In the profit distribution schedule, the total salary allowance will be? Please answer complete required1,2,3A partnership * has only one owner. pays taxes on partnership income. must file an information tax return. is not an accounting entity for financial reporting purposes.
- In their partnership agreement, John, Roy, and Kim, have an income/loss distribution ratio of 4:2:1. How much would each of the three partners receive from an income of $168,000? John will get: $_____________; Roy: $ ____________; and Kin will receive:$ __________Lewis, Zapata, and Fowler share equally in net income and net losses. After the partnership sells all assets for cash, divides the losses on realization, and pays the liabilities, the balances in the capital accounts are as follows: Lewis, $73,500 Cr.; Zapata, $41,000 Cr.;Fowler, $17,000 Dr.a. What term is applied to the debit balance in Fowler’s capital account?b. What is the amount of cash on hand?c. Journalize the transaction that must take place for Lewis and Zapata to receive cash in the liquidation process equal to their capital account balances.In the Quirino-Aquino Partnership, Quirino and Aquino had a capital ratio of 3:1 and a profit and loss ratio of 2:1, respectively. The bonus method was used to record Martial’s admittance as a new, partner. What ratio should be used to allocate, to Quirino and Aquino, the excess of Martial’s contribution over the amount credited to Martial’s capital account? Quirino and Aquino’s new relative profit and loss ratio. Quirino and Aquino’s old capital ratio. Quirino and Aquino’s new relative capital ratio. Quirino and Aquino’s old profit and loss ratio.