Horngren's Accounting (12th Edition)
12th Edition
ISBN: 9780134486444
Author: Tracie L. Miller-Nobles, Brenda L. Mattison, Ella Mae Matsumura
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Videos
Textbook Question
Chapter 12, Problem 8QC
Peter and Steve admit Meredith to their
Learning Objective 4
- Credit the Peter and Steve capital accounts for $35,000 each.
- Cannot be determined because there’s no profit-and loss-sharing ratio.
- Debit the Peter and Steve capital accounts for $35,000 each.
- Credit the Peter and Steve capital accounts for $70,000 each.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Required information
Important Note!
Before you start working on this problem, watch the Hint video. This video shows you exactly how to work this
problem.
[The following information applies to the questions displayed below.] **
Ramer and Knox began a partnership by investing $68,000 and $102,000, respectively. During its first year, the
partnership earned $205,000. Prepare calculations showing how the $205,000 income is allocated under each separate
plan for sharing Income and loss.
Important Notel
Before you start working on this problem, watch the Hint video. This video shows you exactly how to work this problem.
1. The partners did not agree on a plan, and therefore share Income equally
Ramer
Knox
Show Transcribed Text
FINANCIAL ACCOUNTING AND REPORTING
LEARNING MODULES
11. Under the bonus method, the asset
contribution of the partner receiving a bonus
is debited at
a. fair value
b. an increased amount with a corresponding
decrease to the other partner's asset
12. Qand R formed a partnership. Q contributed
cash of P500,000 while R contributed land
with a carrying amount of P400,000 and a
fair value of P800,000. The land has an
unpaid mortgage of P200,000 which is
assumed by the partnership. How much is the
correct valuation of R's capital immediately
after the partnership formation?
a. P400,000
b. P500,000
C. P600,000
d. P800,000
contributions
c. a decreased amount with a corresponding
increase to the other partner's asset
contributions
d. bor c, depending on which partner is
receiving the bonus
13. On July 1, a partnership was formed by Wand 14. Tingga contributes equipment to a
B. W contributed the cash. B previously a sole
proprietor, contributed property other than
cash including realty subject…
Jacob, Susan, and Cody each have a $330,000 capital balance. They share profits and losses as follows: 2:6:2 to Jacob, Susan, and Cody, respectively. Suppose Cody is withdrawing from the business.
Requirements
1. Journalize the withdrawal of Cody if the partnership agrees to pay Cody $330,000 cash.
2. Journalize the withdrawal of Cody if the partnership agrees to pay Cody $210,000 cash.
.....
Requirement 1. Journalize the withdrawal of Cody if the partnership agrees to pay Cody $330,000 cash. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.)
Date
Accounts and Explanation
Debit
Credit
Chapter 12 Solutions
Horngren's Accounting (12th Edition)
Ch. 12 - Prob. 1QCCh. 12 - Prob. 2QCCh. 12 - Prob. 3QCCh. 12 - Which financial statement shows the changes in...Ch. 12 - Prob. 5QCCh. 12 - Prob. 6QCCh. 12 - Prob. 7QCCh. 12 - Peter and Steve admit Meredith to their...Ch. 12 - Prob. 9QCCh. 12 - Prob. 10QC
Ch. 12 - Prob. 1RQCh. 12 - Prob. 2RQCh. 12 - Prob. 3RQCh. 12 - Prob. 4RQCh. 12 - Prob. 5RQCh. 12 - Prob. 6RQCh. 12 - Prob. 7RQCh. 12 - Prob. 8RQCh. 12 - Prob. 9RQCh. 12 - Prob. 10RQCh. 12 - Prob. 11RQCh. 12 - Prob. 12RQCh. 12 - Prob. 13RQCh. 12 - Prob. 14RQCh. 12 - Prob. 15RQCh. 12 - What are the three steps involved in liquidation...Ch. 12 - Prob. 17RQCh. 12 - Prob. S12.1SECh. 12 - Prob. S12.2SECh. 12 - Prob. S12.3SECh. 12 - Prob. S12.4SECh. 12 - Prob. S12.5SECh. 12 - S12-6 Accounting for the admission of a new...Ch. 12 - Accounting for the admission of a new partner...Ch. 12 - Prob. S12.8SECh. 12 - Prob. S12.9SECh. 12 - Prob. S12.10SECh. 12 - Prob. S12.11SECh. 12 - Prob. S12.12SECh. 12 - Prob. E12.13ECh. 12 - Prob. E12.14ECh. 12 - Prob. E12.15ECh. 12 - Prob. E12.16ECh. 12 - Prob. E12.17ECh. 12 - Prob. E12.18ECh. 12 - Prob. E12.19ECh. 12 - Prob. E12.20ECh. 12 - Prob. E12.21ECh. 12 - Prob. E12.22ECh. 12 - Determining characteristics of a partnership and...Ch. 12 - Prob. P12.24APGACh. 12 - Prob. P12.25APGACh. 12 - Prob. P12.26APGACh. 12 - Prob. P12.27APGACh. 12 - Prob. P12.28APGACh. 12 - Prob. P12.29APGACh. 12 - Prob. P12.30APGACh. 12 - Prob. P12.31BPGBCh. 12 - Prob. P12.32BPGBCh. 12 - Prob. P12.33BPGBCh. 12 - Prob. P12.34BPGBCh. 12 - Prob. P12.35BPGBCh. 12 - Accounting for the liquidation of a partnership...Ch. 12 - Prob. P12.37BPGBCh. 12 - Prob. P12.38BPGBCh. 12 - Prob. P12.39CTCh. 12 - P12-40 Accounting for partner contributions,...Ch. 12 - Prob. 12.1TIATCCh. 12 - Prob. 12.1DCCh. 12 - Prob. 12.2DCCh. 12 - Prob. 12.1EICh. 12 - Prob. 12.1FSC
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Can you please show the solution in good accounting form (preferrably in an excel) where it also shows what happens to every partners while solving for the requirement? Thank you so much for your help. It is appreciated. PROBLEM: Gerald, Julia and Bea are partners who decided to terminate their partnership due to misunderstanding. Total assets of the partnership is $480,000 including cash of $30,000. Capital balances of the partners were as follows: Gerald $150,000 Julia $175,000 Bea $67,500. Unpaid liabilities amounted to $87,500. Assets with a book value of $175,000 were sold for $125,000 and the cash was distributed. The P/L ratio is 5:3:2 What amount must the remaining assets be sold in order for Julia to receive $197,500 after liquidation?arrow_forwardProblem #1 (Adapted) Jack and Jill are partners who share profit or loss in the ratio of 3:2. They have capital balance of P200,000 and P300,000, respectively. Jill needed money and made known to Jack her intention to withdraw part of her capital in the partnership. However, much of the partnership funds are tied-up in accounts receivables and inventories and Jack suggested that she just sell the interest of her to Hill, a common friend. Hill agrees to purchase ½ of Jill's interest for P170,000. Required: A. Prepare journal entry in the books of partnership to record the admission of Hill. B. Determine the composition and total partnership capital after admission of Hill. c. Does it necessarily follow that Hill will have 20% share in the profit or loss (1/2 of the share of Jill)?arrow_forwardJason River, Sara Down, and Cam Preti each have a $240,000 capital balance. They share profits and losses as follows: 2.2.6 to River, Down, and Preti, respectively. Suppose Preti is withdrawing from the business Requirements 1. Journalize the withdrawal of Pres if the partnership agrees to pay Pres $240,000 cash 2. Journalize the withdrawal of Preti if the partnership agrees to pay Preti $210,000 cash. Requirement 1. Journalize the withdrawal of Preti if the partnership agrees to pay Pret $240,000 cash (Record debits first, then credits Select the explanation on the last line of the journal entry table) Date Accounts and Explanation Debit Creditarrow_forward
- Arun and Margot want to admit Tammy as a third partner for their partnership. Their capital balances prior to Tammy's admission are $50,000 each. Question Content Area Prepare a schedule showing how the bonus should be divided among the three, assuming the profit or loss agreement will be 1:3 once Tammy has been admitted and her contribution is: If an amount is zero, enter "0". A. $5,000 Total capital of Arun and Margot $fill in the blank a9a449fdc04f047_1 Investment by new partner, Tammy fill in the blank a9a449fdc04f047_2 Total capital of new partnership $fill in the blank a9a449fdc04f047_3 Tammy's capital credit $fill in the blank a9a449fdc04f047_4 Total bonus to Arun and Margot $fill in the blank a9a449fdc04f047_5 Allocation of bonus to Arun and Margot: Arun $fill in the blank a9a449fdc04f047_6 Margot $fill in the blank a9a449fdc04f047_7 B. $62,000 Total capital of Arun and Margot $fill in the blank a9a449fdc04f047_8 Investment by new partner,…arrow_forwardI am coming up with the wrong values, I believe because I am getting tripped up with verbiage. Please help with a descriptive understanding. Thanks Ben Franklin and John Hancock decide to form a partnership. Franklin invests $35,000 cash and accounts receivable of $25,000 less allowance for doubtful accounts of $2,000. Hancock contributes $23,000 cash and equipment having a $5,500 book value. It is agreed that the allowance account should be $3,000 and the fair value of the equipment is $10,000. Prepare the necessary journal entry to record the formation of the partnership.arrow_forwardShow the solution in good accounting form Bruce, Parker and May formed a partnership. Their capital balances showed the following: Bruce, Capital P252,000; Parker, Capital P126,000; May, Capital- P42,000. Their profit and loss ratio are 6:3:1. The partners decide to sell 20 percent of their interest to Violet for a total payment of P120,000 Violet will pay the money directly to the other partners. How much was the bonus debited or credited in partner Bruce's capital account?arrow_forward
- Task 2: X and Y share income of their partnership in a 2:3 ratio. X and Y receive salaries of $18,000 and $12,000, respectively. a) How would they share a net income of $30,000 (before salaries are distributed)? b) You should make the journal entry for this activity. c) In which ways will the results in a) and b) be changed if the ratio is 1:4?arrow_forwardRequired information Important Notel Before you start working on this problem, watch the Hint video. This video shows you exactly how to work this problem. The following information applies to the questions displayed below] 5 Ramer and Knox began a partnership by investing $68,000 and $102,000, respectively. During its first year, the partnership earned $205,000. Prepare calculations showing how the $205,000 income is allocated under each separate plan for sharing income and loss. O Important Note! Before you start working on this problem, watch the Hint video. This video shows you exactly how to work this problem. 2. The partners agreed to share income and loss in proportion to their initial investments. Net Income is $205,000. (Do not round Intermediate calculations.) A $68.000/5170 000 Fraction to Allocate Ramers Share Fraction to Allocate Knox's Share of Total Income Allocated Show Transcribed Text Iarrow_forwardA, B, C are new lawyers and are decided to form a partnership. A is to contribute cash of P50,000 and his computer originally cost P60,000 but has a fair value of P25,000. . B is to contribute cash of P80,000. C, whose family is selling computers, is to contribute cash of P25,000 and a computer with a fair market value of P60,000 but which cost P50,000. Compute C's Capital account to be credited upon formation. . .arrow_forward
- Alex (A), Bebeto (B), and Carol (C) decide to start a lawn mowing business together and form a partnership. A invests $105,000, B invests $175,000, and C invests $280,000. They agree to share the profits in the same ratio as their investments. a. What is the ratio of their investments? Express in lowest terms b. If A's profit was $29.000 in the first vear calculate B's profits and C's profits -> SAVE PROGRESS SUBMIT ASSIGNM 202 acerarrow_forward(2) Example 3 (Equity: Business Ownership): Hanna, Ursula, Thomas and Günther engage in a partnership named "Chick Enterprise. // Chick generates a net income of 75.000 $. 1) Ursula, Thomas and Günther get salary allowances for thei extra professional service for At clients, as follows: 12.000$ for Ursula; 9.000 $ for Thomas and 3.000 for Günther respectively. 11) Average capital balances during the year are as follows: Hanna Ursula Thomas Gunther 42.000 $ 4.200 $ 12.600 $ 25.200 $ Partners agreed for a 7.25 interest allowance for each partner at the end of the year. 84.000 $ [II) After salary & interest allowances, the remainder will be allocated from a fixed ratio of [5:2:4:1] for [Hanna: Ursula: Thomas: Günther Find each partner's capital (equity) and do the closing entry Example 4 (Equity: Business Ownership): Royal Inc. posesses a capital structure as follows: Luis 20 Hector 10 Sanchez 10 (in.000 $) 2) On March 1, Luis decides to sell 10 $ of his share to Martin. 3) On May 1,…arrow_forwardthe capital accounts of brock and ian have balances of $120,000 and $100,000, respectively. carla is to be admitted to the partnership. carla buys 25% of ian’s capital from ian for $20,000. no assets need to be revalued. as an example, enter dollar amounts in this format: 30000 (for 30,000) do not use dollar signs, commas, or decimal points! enter a hyphen if no amount is recorded in that column. otherwise, the system will count it wrong! (a) journalize the entry to record the admission of carla debit credit ian capital question blank 1 of 7 question blank 2 of 7 carla capital question blank 3 of 7 question blank 4 of 7 (b) what are the capital balancarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,
Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSON
Intermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill Education
Financial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON
Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education
Operating Loss Carryback and Carryforward; Author: SuperfastCPA;https://www.youtube.com/watch?v=XiYhgzSGDAk;License: Standard Youtube License