Reference no: EM132633556
Questions -
Q1) Journalizing Partner's Original Investment - Austin Fisher contributed land, inventory, and $28,000 cash to a partnership. The land had a book value of $76,000 and a market value of $137,000. The inventory had a book value of $67,500 and a market value of $62,800. The partnership also assumed a $55,000 note payable owed by Fisher that was used originally to purchase the land.
Required: Provide the journal entry for Fisher's contribution to the partnership. If an amount box does not require an entry, leave it blank.
Q2) Steve Prince and Chelsy Stevens formed a partnership, dividing income as follows:
1. Annual salary allowance to Prince of $194,700.
2. Interest of 5% on each partner's capital balance on January 1.
3. Any remaining net income divided to Prince and Stevens, 1:2.
Prince and Stevens had $81,000 and $117,000, respectively, in their January 1 capital balances. Net income for the year was $330,000. How much is distributed to Prince and Stevens?
Note: Compute partnership share.
Q3) Demarco Lee invested $68,000 in the Camden & Sayler partnership for ownership equity of $68,000. Prior to the investment, equipment was revalued to a market value of $404,000 from a book value of $317,000. Kevin Camden and Chloe Sayler share net income in a 1:3 ratio.
Required: a. Provide the journal entry for the revaluation of equipment.
For a compound transaction, if an amount box does not require an entry, leave it blank.
b. Provide the journal entry to admit Lee.
Q4) Lilly has a capital balance of $103,000 after adjusting assets to fair market value. Lowman contributes $57,000 to receive a 40% interest in a new partnership with Lilly.
Determine the amount and recipient of the partner bonus.
Q5) Prior to liquidating their partnership, Perkins and Montgomery had capital accounts of $71,000 and $116,000, respectively. Prior to liquidation, the partnership had no cash assets other than what was realized from the sale of assets. These partnership assets were sold for $212,000. The partnership had $9,000 of liabilities. Perkins and Montgomery share income and losses equally.
Determine the amount received by Perkins as a final distribution from liquidation of the partnership.
Q6) Prior to liquidating their partnership, Callie and Morrison had capital accounts of $28,000 and $104,000, respectively. The partnership assets were sold for $50,000. The partnership had no liabilities. Callie and Morrison share income and losses equally.
Required:
a. Determine the amount of Callie's deficiency.
b. Determine the amount distributed to Morrison, assuming Callie is unable to satisfy the deficiency.