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Parnership Solution - FORMATION A Cash Furniture Equipment...

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FORMATIONALEONARD BRIDJET RUBY Cash180,000 60,000 72,000 Furniture51,000 Equipment168,000 Machinery30,600 Fixtures 10,000 21,000 Land and Building900,000 Mortgaged assumed by the partnership(540,000) (40,000)Capital balances on 6/1/12580,600 209,000 123,000 BX Y Total Unadjusted capital of X & Y before formation133,000 108,000 241,000 Add(deduct) adjustments:a. ADA(2,700) (1,800) (4,500)b. Inc in inventory3,000 2,000 5,000 c. Inc in equiment6,000 4,000 10,000 d. Unrecorded accrued expenses(2,400) (1,600) (4,000)Adjusted capital of X & Y before formation136,900 110,600 247,500 Multiply by10/8 TAC/TCC309,375 Z Capital balances after formation/investment by Z154,688 92,813 61,875 Cash payment by X to Y(17,788) 17,788 CPETER ALBERT Total Cash782,000 782,000 Merchandise inventory630,000 630,000 Office Equipment252,000 252,000 Mortgaged assumed by the partnership(84,000)(84,000)Total contribution950,000 630,000 1,580,000 Divide by40%TAC1,575,000 Multiply by60%Adjusted interest of Peter945,000 Less: total contribution of Peter950,000 Amount to be withdrawn by Peter(5,000)OPERATIONAX Y Z TOTAL Salaries60,000 48,000 36,000 144,000 Interest (Note 1)13,000 15,000 20,750 48,750 Remainder5,000 ### 5,000 15,000 Total 78,000 68,000 61,750 207,750 Note 1: Interest on Ave. CapitalX Y Z Capital, 1/1/12100,000 150,000 225,000 Additional investment by X (60,000 x 6/12)30,000 Withdrawal by Z (70,000 x 3/12)(17,500)Ave. Capital130,000 150,000 207,500 Multiply by10%10%10%Interest13,000 15,000 20,750 X Y Z TOTAL Capital, 1/1/12100,000 150,000 225,000 475,000 Additional investment60,000 60,000 Share in profit78,000 68,000 61,750 207,750 Withdrawal(70,000) (70,000)Capital, 12/31/12238,000 218,000 216,750 672,750 BDAN JANE IVY TOTAL Salaries3,000 ###6,000 Interest7,400 13,000 9,600 30,000 Bonus (Note 1)18,489 16,640 Remainder66,560 66,560 33,280 166,400 Total 76,960 101,049 42,880 219,040 Note 1: Computation of Bonus to JaneB = .10(166,400)B = 16,640CA B C D TOTAL Salaries5,000 3,000 8,000 Interest2,500 1,250 1,250 1,000 6,000 Remainder5,000 5,000 3,333 3,333 16,667 Total 12,500 9,250 4,583 4,333 30,667 Additional profit inorder to satisfy D's minimum share(2) (3) 1,667 1,667
6,000 32,333 (1) DISSOLUTIONABRIAN CHRIS Total BV of interest sold100,000 120,000 220,000 Share over the gain on sale8,000 12,000 20,000 Cash paid to each selling partner108,000 132,000 (1) (3) BRIAN CHRIS HENO Total Capital balance before admission of HENO200,000 240,000 440,000 BV of interest (sold) purchase(100,000)

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Term
Winter
Professor
N/A
Tags
Payment, partner

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