Record the partnership formation under the bonus method

Assignment Help Accounting Basics
Reference no: EM132574093

Question - John, Jeff, and Jane decided to engage in a real estate venture asa partnership. John invested $100,000 cash and Jeff provided office equipment that is carried on his books at $82,000. The partners agree that the equipment has a fair value of $110,000. There is a $30,000 note payable remaining on the equipment to be assumed by the partnership. Although Jane has no physical assets to invest in the partnership, both John and Jeff believe that her experience as a real estate appraiser is a valuable skill needed by the partnership and is a basis for granting her a capital interest in the partnership.

Required - Assuming that each partner is to receive an equal capital interest in the partnership,

A. Record the partnership formation under the bonus method.

B. Record the partnership formation under the goodwill method, and assume a total goodwill of $90,000.

C. Discuss the appropriateness of using either the bonus or goodwill methods to record the formation of the partnership.

Reference no: EM132574093

Questions Cloud

Compare the levels of progress made in the targeted locales : Write a 700- to 1,050-word paper that discuss in detail one of the imperatives of managing effectively across cultures. Include the following in your paper.
What are the characteristics of self-managed teams : What are the three steps in designing process layouts? What are the characteristics of self-managed teams?
Determine the capacitance of capacitor : The plates are 1.85 mm apart, and the charge on each plate is 0.670 µC. Determine the capacitance of this capacitor. Determine the area of each plate.
Sage tool cryptography : Compute the order of the curve defined by y^2 = x^3 + 7*x + 25 over the finite field with 47 elements
Record the partnership formation under the bonus method : Assuming that each partner is to receive an equal capital interest in the partnership, Record the partnership formation under the bonus method
How might the bill impact your own nursing practice : How might you communicate your concerns about or support for this bill based on nursing practice, standards, or patient outcomes?
Integrating COSO framework compliance : Discuss suggestions for integrating COSO framework compliance into a company in which you are familiar.
Prepare the journal entry to record compensation expense : The Truman Company granted share appreciation rights (SARs) to James Forrestal. Prepare the journal entry to record compensation expense for 2008
Point charge q creates an electric potential : A point charge Q creates an electric potential of +125 V at a distance of 25 cm. What is Q?

Reviews

Write a Review

Accounting Basics Questions & Answers

  An asset was purchased for 12000 the assets estimated

an asset was purchased for 12000. the assets estimated useful life was 3 years and its residual value was 2000. how

  Amount of cash received from the sale

If $4,000,000 of 12% bonds are issued at 101, the amount of cash received from the sale is:

  What is your estmated present value of your lifetime pension

What is your estmated present value of your lifetime pension annuity in today's dollars

  Explain the level of capital spending across the two firms

BUS 650- Next, compare the level of capital spending across the two firms. Point out how the spending was similar and/or different and speculate why the similarities or differences might exist.

  What entry must steve carpet service make on december

What entry must Steve's Carpet Service make on December 31 before financial statements are prepared

  For 2013 x company estimated production of 3500 units of

for 2013 x company estimated production of 3500 units of finished product and direct material cost of 23730. actual

  Prepare adjusting journal entries to recognize stock options

The options expire on January 1, 2022. Prepare the adjusting journal entries, if any, to recognize stock options in 2020

  Compute the selling costs to be assigned to high-intensity

Compute the selling costs to be assigned to the "high-intensity" line of athletic wear for the month of March.

  Discuss what annual interest rate must she earn

Candice Willis will invest $25,373 today. She needs $155,000 in 21 years. What annual interest rate must she earn

  Hobart beverage company uses the weighted-average

Hobart Beverage Company uses the weighted-average method in its process costing system. Materials are included at the start of the production process but conversion costs are uniformly applied throughout the production process.

  What will be the total interest amount for this financing

Penn Inc. needs to borrow $250,000 for the next 6 months. What will be the total interest amount for this financing

  Compute what amount burke will report as cost of goods sold

Compute what amount Burke will report as cost of goods sold after it disposes of its overapplied overhead

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