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prohojiy [21]
3 years ago
5

Wallace and Simpson formed a partnership with Wallace contributing $60,000 and Simpson contributing $40,000. Their partnership a

greement calls for the income (loss) division to be based on the ratio of capital investments. Wallace sold one-half of his partnership interest to Prince for $55,000 when his capital balance was $78,000. The partnership would record the admission of Prince into the partnership as:
Debit Wallace, Capital $39,000; debit Cash $16,000; credit Prince, Capital $55,000.

Debit Wallace, Capital $39,000; credit Prince, Capital $39,000.

Debit Prince, Capital $55,000; credit Wallace, Capital $55,000.

Debit Wallace, Capital $30,000; credit Prince, Capital $30,000.

Debit Wallace, Capital $55,000; credit Prince, Capital $55,000.
Business
1 answer:
Solnce55 [7]3 years ago
6 0

Answer: The correct answer is "Debit Wallace, Capital $39,000; credit Prince, Capital $39,000.".

Explanation:

The company must record the part of the Prince partner for the value of half of Wallace's capital, the difference between the price paid and the portion of capital, is a result for sale that corresponds only to Wallace, not the company.

Therefore half of Wallace's capital is 78000/2 = 39000.

The registration would be:

-------------------------------------------------------------------------

Wallace Capital            39 000

         Prince Capital                    39000

-------------------------------------------------------------------------

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On March 31, 2021, Chow Brothers, Inc., bought 8% of KT Manufacturing’s capital stock for $51.5 million. KT’s net income for the
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Answer and Explanation:

a. The Journal entries are shown below:-

Investment - Capital stock Dr, $51.5 million

         To Cash $51.5 million

(Being investment is recorded)

Unrealized holding gain or loss Dr, $15.5 million ($51.5 - $36.0)

         To Fair value adjustment $15.5 million

(Being fair value adjustment is recorded)

b. Unrealized holding gain or loss Dr, $5.5 million ($51.5 - $30.5 - $15.5)

        To Fair value adjustment $5.5 million

(Being fair value adjustment before sale is recorded)

Cash Dr, $30.5 million

Unrealized holding gain or loss Dr, $21 million

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(Being sale of investment is recorded)

4 0
3 years ago
A coal mine cost $ 1 comma 001 comma 000and is estimated to hold 57 comma 000tons of coal. There is no residual value. During th
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Depletion expenses for the first year is $210736.840

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Depletion expenses= (Cost of coal mine - residual value) / Total tons of coal * tons extracted

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6 0
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thinking strategically about industry and competitive conditions in a given industry involves evaluating such considerations as
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E. how often sellers alter their prices, how sensitive buyers are to price differences among sellers, whether the item being purchased is a good or a service, and whether buyers buy frequently or infrequently.

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Thinking strategically about industry and competitive conditions in a given industry involves evaluating such considerations as <u><em>how often sellers alter their prices, how sensitive buyers are to price differences among sellers, whether the item being purchased is a good or a service, and whether buyers buy frequently or infrequently.</em></u>

The strategy decision making about the industry and competitive conditions involve evaluating the prices, buyer sensitivity to the prices, serviceability & frequency.

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