How much is the capital of CABLES Trading upon formation?
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- On May 1, 2022, Carlo has been in a trading business for five years as a sole proprietor. He needed additional capital to fund business expansion so he decided to invite Jamie by investing cash for a one-third interest in the new partnership, CABLES Trading. CABLES Trading would assume the liabilities of Carlo's business. Jamie accepted the invitation and both agreed to revalue assets of Carlo's business as itemized: Accounts Receivable P50,000; Merchandise Inventory P28,000; Office Equipment P22,000; and Land P279,000. Account balances in the books of Carlo were as follows: Account Titles Debit Credit Cash Accounts Receivable Allowance for Doubtful Accounts Merchandise 25,000 Inventory Office Equipment 33,000 Accumulated 15,000 Depreciation Land 260,000 Accounts Payable 194,000 Carlo, Capital 300,000 How much is the capital of CABLES Trading upon formation? P135,000 60,000 P 4,0008. Bruce and Rachel agree to form a partnership on July 1. Bruce, who has been trading as a sole proprietor, will invest certain business assets at agreed valuations, transfer his business liabilities and contribute sufficient cash to bring his total contribution to a 60% interest over the new business. Details of Bruce's assets and liabilities are given below. Rachel agrees to bring in inventory with a value of P146,500 and P93,500 in cash for a 40% interest in the partnership. The partners have agreed on the following: a) capital accounts will remain fixed; b) 12% interest profit computed on capital; c) salaries of P30,000 each for 2019 but will be twice this amount next year and thereafter; d)10% interest charge on partners' drawings made beyond the agreed salaries; and e) remaining profits are to be shared equally. Direction: a. Prepare two journal entries to set up the partnership. b. Prepare a statement of financial position for the partnership as at July 1 just after formation.…On April 15, 2014, John and Greg formed a partnership. John is to invest a certain business asset at value which are yet to be agreed upon. He is to transfer his business liabilities and is to contribute sufficient cash to bring his total capital to P180,000 which is 60% of the total capital as had been agreed upon. Greg agrees to invest cash of P30,000 and merchandise valued at current market price. Details regarding the lok values of John's assets and liabilities and their corresponding valuations are: Вook Agreed values values Accounts receivable P54,000 P54,000 Allowance for bad debts 3,600 6,000 Merchandise inventory 96,600 105,000 27,000 Store equipment Accumulated depreciation-SE Office equipment Accumulated depreciation- OE Accounts payable 27,000 18,000 13,200 18,000 18,000 9,600 4,800 48,000 48,000 The value of merchandise to be invested by Greg? The cash to be invested by John?
- On January 1, 2024, John Jarell, Andrew Martin, and Susan Montgomery formed a partnership by investing $100,000, $100,000, and $120,000 respectively. During the remainder of the year, John Jarell withdrew cash of $45,000, Andrew Martin withdrew $15,000 and Susan Montgomery withdrew $39,000. In addition, the following schedule shows how net income is allocated. Net income: Salaries: Interest: John Jarell Andrew Martin Susan Montgomery Total 100,000 21,000 5,000 26,000 Total salary and interest: Remainder to be allocated: Remainder allocated between partners: 8,000 Balance of net income to be allocated: Total to be allocated to each partner: Date 34,000 18,000 5,000 23,000 8,000 31,000 Page GJ2 F Debit Credit 21,000 6,000 27,000 b) Calculate the post-closing balance in each partners' capital account. John Jarell, Capital Andrew Martin, Capital Susan Montgomery, Capital. 8,000 35,000 a) Prepare the entry to close the income summary account. Enter an appropriate description and the date in…On January 1, 2022, Sam and Sara formed a new business entity called Nice Brother Co. Sam contributes $250,000 cash and Sara contributes land with an adjusted basis of $300,000 and fair market value of $492,000 with a mortgage of $258,000 that is assumed by Nice Brother Co. Assume the following operating results for 2022: Sales $ 1,500,000 Interest income – from a bank $ 3,200 Royalties $ 60,000 Loss from sale of investment $ (7,000) Cost of goods sold $ 622,000 Salaries $ 450,000 Rent $ 144,000 Maintenance $ 24,000 Utilities $ 58,000 EPA penalty $ 1,000 Depreciation ? Charitable contribution $ 30,000 Payment to Sam for retirement* $ 15,000 *payment considered a guaranteed payment if the entity is a partnership The company’s only depreciable asset is equipment (useful life of 5 years) which will be purchased in 2022 for $100,000. The only asset sold was an investment purchased on 2/2/22 for $28,000 and sold on 11/4/22 for $21,000 What are the separately stated items allocated…Alford, Beeson, and Carlton have operated a coffee shop for a number of years as a partnership. At the beginning of 2024, capital balances were as follows: Alford Beeson Carlton Due to a cash shortage, Alford invests an additional $10,000 in the business on April 1, 2024. Each partner is allowed to withdraw $800 cash each month. The partners have used the same method of allocating profits and losses since the business's inception: Each partner is given the following compensation allowance for work done in the business: Alford, $15,000; Beeson, $25,000; and Carlton, $8,000. $ 84,000 64,000 20,000 • Each partner is credited with interest equal to 20 percent of the average monthly capital balance for the year without regard for normal drawings. Any remaining profit or loss is allocated 5:2:3 to Alford, Beeson, and Carlton, respectively. The net income for 2024 is $26,000. Each partner withdraws the allotted amount each month. Required: Prepare a schedule showing calculations for the…
- Alford, Beeson, and Carlton have operated a coffee shop for a number of years as a partnership. At the beginning of 2024, capital balances were as follows: Alford Beeson Carlton Due to a cash shortage, Alford invests an additional $10,000 in the business on April 1, 2024. Each partner is allowed to withdraw $600 cash each month. The partners have used the same method of allocating profits and losses since the business's inception: • Each partner is given the following compensation allowance for work done in the business: Alford, $14,000; Beeson, $30,000; and Carlton, $4,000. $ 94,000 74,000 20,000 • Each partner is credited with interest equal to 20 percent of the average monthly capital balance for the year without regard for normal drawings. • Any remaining profit or loss is allocated 5.3.2 to Alford, Beeson, and Carlton, respectively. The net income for 2024 is $27,000. Each partner withdraws the allotted amount each month. Required: Prepare a schedule showing calculations for the…Yin and Jordan form a Corporation together on March 22, 2022. Jordan transfers cash of $300,000 in exchange for 30,000 shares. Yin transferred a Patent with a basis of $50,000 and FMV of $60,000 in exchange for 26,000 shares in the company and an office building with a basis of $110,000, liabilities of $40,000 and FMV of $200,000. What is Yin's basis in the 26,000 shares she got in the exchange on March 22, 2022? What is the Corporation's basis in the "Office Building" received from Yin?Bruce and Rachel agree to form a partnership on July 1. Bruce, who has been trading as a sole proprietor, will invest certain business assets at agreed valuations, transfer his business liabilities and contribute sufficient cash to bring his total contribution to a 60% interest over the new business. Details of Bruce's assets and liabilities are given below (please see the attached image) Rachel agrees to bring in inventory with a value of P146,500 and P93,500 in cash for a 40% interest in the partnership. The partners have agreed on the following: a) capital accounts will remain fixed; b) 12% interest profit computed on capital; c) salaries of P30,000 each for 2019 but will be twice this amount next year and thereafter; d)10% interest charge on partners' drawings made beyond the agreed salaries; and e)remaining profits are to be shared equally. Directions: a. Prepare two journal entries to set up the partnership b. Prepare a statement of financial position for the partnership as…
- 8. Bruce and Rachel agree to form a partnership on July 1. Bruce, who has been trading as a sole proprietor, will invest certain business assets at agreed valuations, transfer his business liabilities and contribute sufficient cash to bring his total contribution to a 60% interest over the new business. Details of Bruce's assets and liabilities are given below. (see attached image, please answer it based on your knowledge, thank you!) Rachel agrees to bring in inventory with a value of P146,500 and P93,500 in cash for a 40% interest in the partnership. The partners have agreed on the following: a) capital accounts will remain fixed; b) 12% interest profit computed on capital; c) salaries of P30,000 each for 2019 but will be twice this amount next year and thereafter; d)10% interest charge on partners' drawings made beyond the agreed salaries; and e) remaining profits are to be shared equally. Direction: a. Prepare two journal entries to set up the partnership. b. Prepare a statement…On June 1 of the current year, Jocson and Gomez form a partnership. Jocson is to invest certain business assets at values which are yet to be agreed upon. He is to transfer his business liabilities and is to contribute sufficient cash to bring his total capital to P 180,000, which is 60% of the total capital as had been agreed upon. Details regarding the book values of Jocson's business assets and liabilities and their corresponding valuation follow: Вook Agreed Values Valuations Accounts Receivable P 54,000 P 54,000 Allowance for doubtful accounts 3,600 6,000 Merchandise Inventory 96,600 105,000 Store Equipment Accumulated Depreciation - Store equipment 27,000 27,000 18,000 13,200 Office equipment Accumulated Depreciation - Office equipment 18,000 18,000 9,600 4,800 Accounts payable 48,000 48,000 Gomez agrees to invest cash of P 30,000 and merchandise valued at current market price. Determine the value of the merchandise to be invested by Gomez.On May 1 of the current year, Anna Austin and Dave Walls form a partnership. Austin agrees toinvest $10,500 in cash and merchandise inventory valued at $39,500. Walls invests certainbusiness assets at valuations agreed upon, transfers business liabilities, and contributes sufficientcash to bring his total capital to $40,000. Details regarding the book values of the businessassets and liabilities, and the agreed valuations, follow: Wall’s Ledger Balance Agreed Valuation Accounts Receivable $20,750 $19,500 Allowance for Doubtful Accounts 950 800 Equipment 79,100} 45,000 Accumulated Depreciation 35,200} Accounts Payable 14,000 14,000 Notes Payable 15,000 15,000 (See Image) Required: 3. After adjustments and the closing of revenue and expense accounts at April 30. the end of the first full year of operations, the income summary account has a credit balance of $68,000, and the drawing accounts have debit balances of $20,000…