Question
1. Chesterfield Company holds cash of $72,000, inventory worth $134,000, and a building worth $152,000. Unfortunately, the company also has accounts payable of $202,000, a
1. Chesterfield Company holds cash of $72,000, inventory worth $134,000, and a building worth $152,000. Unfortunately, the company also has accounts payable of $202,000, a note payable of $102,000 (secured by the inventory), liabilities with priority of $43,600, and a bond payable of $194,000 (secured by the building).
In a Chapter 7 bankruptcy, how much money will the holder of the bond expect to receive?
Need Help to solve solution:
Total amount received by bond holders:
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week 7
7. The Prince-Robbins partnership has the following capital account balances on January 1, 2015:
Prince is allocated 80 percent of all profits and losses with the remaining 20 percent assigned to Robbins after interest of 10 percent is given to each partner based on beginning capital balances.
Prince, Capital..... $145,000 Robbins, Capital.. 135,000
On January 2, 2018, Jeffrey invests $82,000 cash for a 20 percent interest in the partnership. This transaction is recorded by the goodwill method. After this transaction, 10 percent interest is still to go to each partner. Profits and losses will then be split as follows: Prince (50 percent), Robbins (30 percent), and Jeffrey (20 percent). In 2018, the partnership reports a net income of $35,000.
a. Prepare the journal entry to record Jeffrey's entrance into the partnership on January 2, 2018.
b. Determine the allocation of income at the end of 2018
Need Help complete this question by entering your answers in the tabs below:
A. Prepare the journal entry to record Jeffreys entrance into the partnership on January 2, 2018. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
| No | Transaction | General Journal | Debit | Credit |
| 1 | 1 | No Transaction Recorded |
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B. Determine the allocation of income at the end of 2018.
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4.
The E.N.D. partnership has the following capital balances as of the end of the current year:
Pineda $ 140,000
Adams120,000
Fergie 110,000
Gomez 100,000
a. assume the partners share profits and losses 3:3:2:2, respectively. Fergie retires and is paid $140,000 based on the terms of the original partnership agreement. If the goodwill method is used, what is the capital balance of the remaining three partners?
b. Assume that the partners share profits and losses 4:3:2:1, respectively. Pineda retires and is paid $340,000 based on the terms of the original partnership agreement. If the bonus method is used, what is the capital balance of the remaining three partners? (Do not round your intermediate calculations. Round your final answers to the nearest dollar amounts.)
Capital Balance.
a. Pineda
Adams
Gomez
b. Adams
Fergie
Gomez
5.
ray, Stone, and Lawson open an accounting practice on January 1, 2016, in San Diego, California, to be operated as a partnership. Gray and Stone will serve as the senior partners because of their years of experience. To establish the business, Gray, Stone, and Lawson con-tribute cash and other properties valued at $210,000, $180,000, and $90,000, respectively.
An articles of partnership agreement is drawn up. It has the following stipulations: Personal drawings are allowed annually up to an amount equal to 10 percent of the beginning capital balance for the year. Profits and losses are allocated according to the following plan:
(1) A salary allowance is credited to each partner in an amount equal to $8 per billable hour worked by that individual during the year.
(2) Interest is credited to the partners capital accounts at the rate of 12 percent of the average monthly balance for the year (computed without regard for current income or drawings).
An annual bonus is to be credited to Gray and Stone. Each bonus is to be 10 percent of net income after subtracting the bonus, the salary allowance, and the interest. Also included in the agreement is the provision that the bonus cannot be a negative amount.
(4) Any remaining partnership profit or loss is to be divided evenly among all partners.
Because of monetary problems encountered in getting the business started, Gray invests an additional $9,100 on May 1, 2016. On January 1, 2017, the partners allow Monet to buy into the partnership. Monet contributes cash directly to the business in an amount equal to a 25 percent interest in the book value of the partnership property subsequent to this contribution. The partnership agreement as to splitting profits and losses is not altered upon Monets entrance into the firm; the general provisions continue to be applicable.
The billable hours for the partners during the first three years of operation follow:
2016 2017 2018
Gray . . . . . . . . . . . . . 1, 710 1,800 1,880
Stone . . . . . . . . . . . . . 1,440 1,500 1,620
Lawson . . . . . . . . . . . 1,300 1,380 1,310
Monet . . . . . . . . . . . . 0 1,190 1,580
The partnership reports net income for 2013 through 2015 as follows: 2013 . . . . . 2016. . . . . . . . . . . . . . . . . . $ 65,000
2017 . . . . . . . . . . . . . . . . . . . (20,400)
2018 . . . . . . . . . . . . . . . . . . . 152,800
Each partner withdraws the maximum allowable amount each year.
a. Determine the allocation of income for each of these three years (to the nearest dollar).
b. Prepare in appropriate form a statement of partners capital for the year ending December 31, 2018.
Need Help to Solve solutions as follow:
Req A 2016
Determine the allocation of income for 2016. (Loss amounts should be indicated with a minus sign. Do not round intermediate calculations. Round your answers to the nearest dollar amounts.)
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Req A 2017
Determine the allocation of income for 2017. (Loss amounts should be indicated with a minus sign. Do not round intermediate calculations. Round your answers to the nearest dollar amounts.)
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Req A 2018
Determine the allocation of income for 2018. (Do not round intermediate calculations. Round your answers to the nearest dollar amounts.)
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Req B
Prepare in appropriate form a statement of partners capital for the year ending December 31, 2018. (Amounts to be deducted should be indicated with minus sign. Do not round intermediate calculations. Round your answers to nearest dollar amounts.)
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Advanced Accounting
Authors: Joe Hoyle, Thomas Schaefer, Timothy Doupnik
10th edition
0-07-794127-6, 978-0-07-79412, 978-0077431808
