Bill, Bob, and Bo, are partners in the Trendy Company, a retailer of inexpensive kids' wear. They share profits and losses in a 1:4:5 ratio and have decided to expand their business territory. They have agreed to admit Burt to the partnership for a cash investment. Their capital balances are currently P60,000, P100,000, and P140,000, respectively. Burt has been offered a 15% interest in the firm for P130,000. Assuming Burt takes the offer, the entry to record his investment in the partnership includes a: a. credit to gain on sale of partnership interest for P85,000 b. debit to Burt, capital for P45,000 c. credit to Burt, capital for P45,000 d. debit to cash for P130,000

Bill, Bob, and Bo, are partners in the Trendy Company, a retailer of inexpensive kids' wear. They share profits and losses in a 1:4:5 ratio and have decided to expand their business territory. They have agreed to admit Burt to the partnership for a cash investment. Their capital balances are currently P60,000, P100,000, and P140,000, respectively. Burt has been offered a 15% interest in the firm for P130,000. Assuming Burt takes the offer, the entry to record his investment in the partnership includes a: a. credit to gain on sale of partnership interest for P85,000 b. debit to Burt, capital for P45,000 c. credit to Burt, capital for P45,000 d. debit to cash for P130,000

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter14: Choice Of Business Entity—operations And Distributions

Section: Chapter Questions

Problem 47P

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Bill, Bob, and Bo, are partners in the Trendy Company, a retailer of inexpensive kids' wear. They share profits and losses in a 1:4:5 ratio and have decided to expand their business territory. They have agreed to admit Burt to the partnership for a cash investment. Their capital balances are currently P60,000, P100,000, and P140,000, respectively. Burt has been offered a 25% interest in the firm for P60,000 cash investment. Assuming Burt takes the offer, the entry to record his investment in the partnership includes a: a debit to cash for P75,000 b. debit to loss on sale of partnership interest for P46,000 c credit to Bill, capital for P1,500 d. debit to Bob, capital for P12,000
Bill, Bob, and Bo, are partners in the Trendy Company, a retailer of inexpensive kids' wear. They share profits and losses in a 1:4:5 ratio and have decided to expand their business territory. They have agreed to admit Burt to the partnership for a cash Investment. Their capital balances are currently P60,000, P100,000, and P140,000, respectively. Assuming Burt contributes P80,000 for a 20% interest, the entry to record his investment in the partnership includes a: a. credit to Burt, capital for P76,000 b. debit to Bill, capital for P2,000 c. debit to Bob, capital for P8,000 d. credit to Bo, capital, for P10,000
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