How much is the adjusted capital of Katy

Assignment Help Financial Accounting
Reference no: EM132804347

Question - KATY, a sole proprietor wanted to expand her profitable business but she does not have enough resources. So, she thought of inviting PERRY to join her and formed a partnership on April 1, 2020. Just before admission, KATY had the following assets and liability accounts: Cash - $420,000; Accounts receivable -$380,000; Inventories -$250,000;Notes payable -$100,000. PERRY agreed to contribute cash equal to 30% of KATY's capital after considering the following adjustments: (a) 2% allowance for bad debts should be recognized, (b) the inventories have fair market value equal to 120% of the balance.

Q1. How much is the adjusted capital of Katy?

$950,000

$1,007,600

$1,242,400

$992,400

Q2. How much should Perry contribute to the partnership?

$297,720

$302,280

$372,720

$285,000

Q3. How much is the total assets of the partnership after the formation?

$1,342,400

$1,389,080

$1,357,600

$1,390,120

Reference no: EM132804347

Questions Cloud

What amount of inventory should be reported : Page received the goods on January 4, 2021. What amount of inventory should be reported in the December 31, 2020 Financial Position
Calculate the expected value : After doing some research, you estimate about a 65% chance the event will take place. If the event takes place, Calculate the expected value
Why classroom practice for language is seen different : Discuss why classroom practice for language is seen different than classroom practice for perceived non-language content? What are five takeaways.
Summarize the chapter the reign of god in human lives : Summarize the Chapter the reign of god in human lives.
How much is the adjusted capital of Katy : KATY, a sole proprietor wanted to expand her profitable business but she does not have enough resources. How much is the adjusted capital of Katy
Describe how the counselor works to help individuals : A reflection component: In this 5 - 7 page paper each student will address how they have grown/changed through the program. The student will present the ideas.
How the ethical use of various assessments guides you : How the ethical use of various assessments and data guides you to identify students' strengths and needs to promote growth. How your assessments will support.
Is integrity more important trait for an accountant to have : Is integrity a more important trait for an accountant to have then the extent of knowledge? Why? How can you tell if you are dealing with a high integrity
Write description of a summative assessment : Creating formative and summative assessments for your assignments is an essential part of guiding instruction for learning. Not only are assessments ensuring.

Reviews

Write a Review

Financial Accounting Questions & Answers

  Market value of equity-what is the value-to-ebita ratio

A firm has $600 market value of equity and $300 market value of debt. The firm also has $100 in nonconsolidated subsidiaries and $50 in excess cash. If the firm’s expected EBITA is $100, what is the value-to-EBITA ratio?

  Assume the carrying value of the bonds

Lerner Inc. issued bonds several years ago for more than face value. The bonds had a face value of $100,000 and pay interest annually at 9% on 12/31 each year. The market rate on the date of issue was 8%. Assume the carrying value of the bonds throug..

  What is the estimated bad debt expense for current year

Allowance for Doubtful Accounts is $540. Credit sales during the year totaled $154,000. What is the estimated Bad Debt Expense for the current year?

  Compute for the dividends for preferred shares

How much of the EAIT were added to retained earnings account. Compute for the dividends for preferred shares; for common shares.

  Prepare the journal entry to record bad debt expense

Prepare the necessary journal entries for Perez Computers. 5 E7-7 (Recording Bad Debts) Duncan Company reports the following financial information before adjustments. Prepare the journal entry to record Bad Debt Expense assuming Duncan Company estima..

  Determine whether or not an arbitrage opportunity exists

If the model and the table are both correct, determine whether or not an arbitrage opportunity exists. If not, why not? If so, explain how to exploit it.

  Oxley act is defined as not being part of management team

The Sarbanes-Oxley Act requires that each member of the company's audit committee be a member of the board of directors and be independent. Independence in the Act is defined as not being part of the management team and not receiving any compensation..

  What is the price of the bond

What is the expected growth rate of Dorpac's dividends and what is the expected growth rate of Dorpac's share price - What is the price of the bond

  Manufacturing has an unfavorable direct labor variance

Tolley manufacturing has an unfavorable direct labor variance. Which of the following would be the most likely reason for this variance. a= company used lower paid workers than they expected B= employees took longer to produce products C= company gav..

  Why have excess liquidity that earns nothing for the company

By the way, the higher the current ratio the better is not really true. Why have excess liquidity that earns nothing for the company e.g., Apple? MSFT?

  Perform the required journal entries

Using the data in the attached spreadsheet perform the accounting required for the elimination of each independent intercompany transaction: Prepare the book calculations and Perform the required journal entries.

  What is the current value of the call option

If the annual risk-free rate is 6%, then how much is the riskless portfolio worth today (assuming daily compounding)? What is the current value of call option

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd