Reference no: EM13935224
Boswell and Johnson form a partnership on May 1, 2009. Boswell contributes cash of $50,000; Johnson conveys title to the following properties to the partnership:
|
Book Value
|
Fair Value
|
|
Land
|
$15,000
|
$28,000
|
|
Building and equipment
|
35,000
|
36,000
|
The partners agree to start their partnership with equal capital balances. No goodwill is to be recognized. According to the articles of partnership written by the partners, profits and losses are allocated based on the following formula:
• Boswell receives a compensation allowance of $1,000 per month.
• All remaining profits and losses are split 60:40 to Johnson and Boswell, respectively.
• Each partner can make annual cash drawings of $5,000 beginning in 2010.
Net income of $11,000 is earned by the business during 2009.
Walpole is invited to join the partnership on January 1, 2010. Because of her business reputation and financial expertise, she is given a 40 percent interest for $54,000 cash. The bonus approach is used to record this investment, made directly to the business. The articles of partnership are amended to give Walpole a $2,000 compensation allowance per month and an annual cash drawing of $10,000. Remaining profits are now allocated:
|
Johnson
|
48%
|
|
Boswell
|
12
|
|
Walpole
|
40
|
All drawings are taken by the partners during 2010. At year-end, the partnership reports an earned net income of $28,000.
On January 1, 2011, Pope (previously a partnership employee) is admitted into the partnership.
Each partner transfers 10 percent to Pope, who makes the following payments directly to the partners:
|
Johnson
|
$5,672
|
|
Boswell
|
7,880
|
|
Walpole
|
8,688
|
Once again, the articles of partnership must be amended to allow for the entrance of the new partner. This change entitles Pope to a compensation allowance of $800 per month and an annual drawing of $4,000. Profits and losses are now assigned as follows:
|
Johnson
|
40.50%
|
|
Boswell
|
13.5
|
|
Walpole
|
36
|
|
Pope
|
10
|
For the year of 2011, the partnership earned a profit of $46,000, and each partner withdrew the allowed amount of cash.
Determine the capital balances for the individual partners as of the end of each year: 2009 through 2011.
|
Why do molecular biologists use restriction enzymes
: What is the difference between type I and type II restriction endonucleases and why are type II restriction endonucleases more useful for molecular biologists than type I restriction endonucleases?
|
|
Analyze the major steps related to planning the audit
: Go to the PCAOB Website (http://pcaobus.org/Pages/default.aspx) to review the internal control requirements (Auditing Standard No. 5). Next, analyze the major steps related to planning the audit
|
|
What controversy history of discovery of structure of dna
: What is the controversy around the history of the discovery of the structure of DNA? Who do you think should receive credit? How does giving credit only to Watson and Crick reflect on the Scientific Method in general? Please provide references as ..
|
|
Debate on the health warnings on cigarette packs
: a. Who are major stake holders in the debate on the health warnings on cigarette packs? b. What are the main ethical issues involved in the debate?
|
|
Determine the capital balances for the individual partners
: Boswell and Johnson form a partnership on May 1, 2009. For the year of 2011, the partnership earned a profit of $46,000, and each partner withdrew the allowed amount of cash. Determine the capital balances for the individual partners as of the end of..
|
|
Literature review dealing with organic farming and barriers
: A literature review dealing with organic farming and the barriers (mostly barriers ) and benefits that it faces, with an addition of a case study which is Organic Farming in Scotland.
|
|
Riverview but pay the rate the guests would have been charge
: Riverview but pay the rate the guests would have been charged at the Pines ($160 per room) rather than paying the normal rate of $260 per room at the Riverview.
|
|
People contribution to project management
: The effectiveness of projects is partly concerned with how people fit in and contribute to the success of the project. This means there may be synergies in group decision making compared to individual decision making.
|
|
Explain why a is diagonalizable, find by hand a matrix p
: Using your technology, compute A5 and use it to ?nd u5 and y5.4. Explain why A is diagonalizable. Find (by hand) a matrix P and a diagonal matrix D for which A = PDP-1. Use your technology to calculate D10, and use it to ?nd A10, u10, and y10. Con?rm..
|