Within the partnership, Jamestown's capital is $140,000, and Maryland's is $40,000. They share income in a 3:2 ratio, respectively. They decide to admit Manhattan to the partnership. Assume that Manhattan invests $50,000 for a one-fifth interest. Goodwill is to be recorded. What is the capital balances of Maryland after Manhattan is admitted into the partnership? Answer: 48000 The correct answer is: 48000

Within the partnership, Jamestown's capital is $140,000, and Maryland's is $40,000. They share income in a 3:2 ratio, respectively. They decide to admit Manhattan to the partnership. Assume that Manhattan invests $50,000 for a one-fifth interest. Goodwill is to be recorded. What is the capital balances of Maryland after Manhattan is admitted into the partnership? Answer: 48000 The correct answer is: 48000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

X and Y are partners sharing profits 6:4, respectively. Capital accounts as of October 1, 2021 are X-P 560,000; Y-P 480,000. They agree to admit Z as a new partner with an investment of P260,000 for a interest in the partnership and that the assets are fairly valued, what would be the capital of Y after the admission of Z?
2. Hammer and Nail formed a partnership. Hammer contributed equipment with original cost of P370,000 and fair value of P300,000 while Nail contributed cash of P180,000. Hammer and Nail agreed to have a 60:40 interest in the partnership and that their initial capital credits should reflect this fact. A partner's capital account should be increased accordingly by way of additional cash investment. Which of the partners should make an additional investment and by how much? a. Hammer, P20,000 b. Nail, P20,000 c. Hammer, P70,000 d. Nail, P70,000
A written Partnership Agreement states: Partner A is to contribute capital of $20,000 and devotes full time work to the partnership. Partner B is to contribute capital of $30,000 and devotes half time work to the partnership. Therefore, in what ratio is net income to be divided? Group of answer choices a) 1:2 b) 3:5 c) 2:3 d) 1:1
X and Y are partners sharing profits 6:4, respectively. Capital accounts as of October are 1, 2021 X-P 560,000, Y-P 480,000 They agree to admit Z as a new partner with an investment of P260,000 for a interest in the partnership and that the assets are fairly valued, what would be the capital of Y after the admission of Z? A.P 480,000 B.P 506,000 C.P 454,000 D. P325,000
X and Y are partners sharing profits 6:4, respectively. Capital accounts as of October are 1, 2021 X-P 560,000, Y-P 480,000 They agree to admit Z as a new partner with an investment of P260,000 for a interest in the partnership and that the assets are fairly valued, what would be the capital of Y after the admission of Z? A. P 480,000 B. P 506,000 C. P 454,000 D. P325,000
GWS and BCP organized the GB Partnership on January 1, 2018. The following entries were made in their capital accounts during 2018. Debit Credit GWS, Capital: January 1 April 1 October 1 P315,000 P105,000 175,000 Debit Credit ВСР, Саpital: January 1 March P413,000 1 September 1 November 1 52,500 105,000 94,500 Required: А. If the partnership profit for the year 2018 computed before salaries or interest is P217,000, determine its distribution between the partners under each of the following independent profit-sharing agreements: (1) Interest at 6% is allowed on average capital investments and the remainder of the profit is divided equally. (2) A salary of P126,000 is to be credited to BCP, 6% interest is allowed on each partner on his ending capital balance and the remainder of the profit in the ratio of 3:2. Salaries are allowed GWS and BCP in amounts of P119,000 and P133,000, respectively, and the remaining profit or resulting loss is divided in the ratio of average capital balance.…
Red, White and Blue form a partnership on May 1, 2020. They agree that Red will contribute office equipment with a total fair value of P 40, 000; White will contribute delivery equipment with a fair value of P 80, 000; and Blue will contribute cash. If Blue want a one- third interest in the capital and profits, how much total partnership capital would be? * •60, 000 O :40, 000 O : 180, 000 O :120, 000
A and B agreed to form a partnership. The partnership agreement stipulates the following: Initial capital of $280,000 A 60:40 interest in the equity of the partnership, A. Contributed $200,000 cash while B. Contributed $280,000 cash. Requirement: Which partner should provide additional investment(or withdraw part of this investment in order to bring the partners capital credits equal to their respective interest in the equity of the partnership?
Fill in the blnnks: Tim and Michelle have decided to form a partnership with a 60/40 partnership interest ratio. Tim contributes P7500 cash and merchandise invetory with a market value of P1500. a. Tim, Capital will be credited in the amount of b. Michelle's investment should be c. After accounting for the total investments of Tim and Michelle, the total assets of the partnership amounts to
The partnership agreement of partners A, B and C stipulates the following:• A shall receive a salary of ₱40,000.• Interest of 10% shall be computed on the partners’ capital contributions of ₱40,000, ₱100,000 and₱200,000.• Balance is divided among the partners on a 2:3:5 ratio. However, C is guaranteed a minimum share of₱40,000, inclusive of interest, if the partnership earns profit.3. How much is the minimum level of profit necessary so that A shall receive a total of ₱50,000, inclusiveof salary, interest and share in remaining profit, and C shall also receive his guaranteed minimum share?
2. A and B agreed to form a partnership. A shall contribute ₱80,000 cash while B shall contribute ₱200,000 cash. However due to the expertise that A will be bringing to the partnership, the partners agreed that they should initially have equal interests in the partnership capital. After recording the partners’ contributions, A’s capital account should have a balance of
1) C is admitted in the partnership of A and B by investing P120,000 for an interestequal to P150,000. Assuming that the net assets of the partnership prior to C'sadmission are fairly valued, this transaction would result in A. a decrease of P30,000 in the total partnership assets B. a decrease in the capital balances of A and B C. an increase in the capital balances of A and B D. the recognition of goodwill by the partnership 2) A partnership records the admission of a new partner through purchase of interest bycrediting the purchaser's capital and debiting A. capital account of other partners B. bonus account C. cash account D. capital account of the selling partner