Carson and Lamb establish a partnership to operate a used-furniture business under the name C & L Furniture. Carson contributes furniture that cost P60,000 and has a fair value of P90,000. Lamb contributes P30,000 cash and delivery equipment that cost P40,000 and has a fair value of P30,000. The partners agree to share profits and losses 60% to Carson and 40% to Lamb. Calculate the peso inequity that will result if the initial contributions of the partners are recorded at cost rather than fair market value. a. 10,000 b. 18,000 c. 20,000 d. 30,000

Carson and Lamb establish a partnership to operate a used-furniture business under the name C & L Furniture. Carson contributes furniture that cost P60,000 and has a fair value of P90,000. Lamb contributes P30,000 cash and delivery equipment that cost P40,000 and has a fair value of P30,000. The partners agree to share profits and losses 60% to Carson and 40% to Lamb. Calculate the peso inequity that will result if the initial contributions of the partners are recorded at cost rather than fair market value. a. 10,000 b. 18,000 c. 20,000 d. 30,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Carson and Lamb establish a partnership to operate a used-furniture business under the name C & L Furniture. Carson contributes furniture that cost P60,000 and has a fair value of P90,000. Lamb contributes P30,000 cash and delivery equipment that cost P40,000 and has a fair value of P30,000. The partners agree to share profits and losses 60% to Carson and 40% to Lamb. Calculate the peso inequity that will result if the initial contributions of the partners are recorded at cost rather than fair market value.
Singer and McMann are partners in a business. Singer's original capital was $40,000 and McMann's was $60,000. They agree to salaries of $12,000 and $18,000 for Singer and McMann, respectively, and 10% interest on original capital. If they agree to share the remaining profits and losses on a 3:2 ratio (3/5 to Singer and 2/5 to McMann), what will McMann's share of the income be if the income for the year is $30,000?
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Singer and McMann are partners in a business. Singer's original capital was $40,000 and McMann's was $60,000. They agree to salaries of $12,000 and $18,000 for Singer and McMann, respectively, and 10% interest on original capital. If they agree to share the remaining profits and losses on a 3:2 ratio, what will McMann's share of the income be if the income for the year is $15,000?
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Paddison and Wager have formed a partnership. During their first year of operations, the partnership earned $160,000. Their-profit-and-loss-sharing agreement states that, first, each partner will receive 20% of their capital balances. The second level is based on services, with $10,000 to Paddison and $20,000 to Wager. The remainder then will be shared 4:1 between Paddison and Wager, respectively. Read the requirements. ..... Requirement 1. Calculate the amount of income each partner will receive under their profit-and-loss-sharing agreement assuming Paddison's capital balance is $91,000 and Wager's capital balance is $91,000. (Complete all answer boxes. For amounts that are $o, make sure to enter "0" in the appropriate column.) Paddison Wager Total Net income (Iloss) Requirements Capital allocation: Paddison 1. Calculate the amount of income each partner will receive under their profit-and-loss-sharing agreement assuming Paddison's capital balance is $91,000 and Wager's capital…
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