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stira [4]
2 years ago
7

Partner Beth has a basis of $10,000 in a partnership at the beginning of the year. She receives $6,000 in cash distributions, he

r distributive share of income is $5,000, and she receives a land distribution with a basis of $8,000 (FMV $20,000). What is Beth’s partnership interest basis at the end of the year?
a. $0
b. $1,000
c. $9,000
d. $10,000
Business
1 answer:
Elan Coil [88]2 years ago
4 0

Answer:

b. $1,000

Explanation:

Basis at the beginning of the year $10,000

Less cash received $6,000

=$4,000

Distributive share of income is $5,000

Less land distribution with a basis of $8,000

=$3,000

Hence:

$4,000-$3,000

=$1,000

Therefore Beth’s partnership interest basis at the end of the year will be $1,000

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The journal entry required to close the Drawing account is _____. a debit to Income Summary account and a credit to Drawing acco
Alex_Xolod [135]

The journal entry required to close the Drawing account is debit to Income Summary account and a credit to Drawing account.

Option a) is correct.

<h2>What is  Income Summary account ?</h2>

An income summary is a temporary account that is used to net the closing entries from all the revenue and expense accounts at the conclusion of the accounting quarter. The final balance is regarded as a gain or loss. The company made a profit for that year if the net balance of the income summary is a credit balance, and a loss for that year if the net balance is a debit balance.

It lists all earnings and costs related to both operational and non-operating operations. It is also known as a revenue and expense summary as a result.

Learn more about Income summary Accounts here:

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8 0
1 year ago
Consider the circular flow model to answer the questions that follow.
Zarrin [17]

Answer:

The answer is :

A. Resource market - income

B. Expenditure - product market.

Explanation:

A. Resource market - income

B. Expenditure - product market

The circular flow model shows how money moves through the economy in exchange for goods, services, and resources.

A.

In circular flow of income, households provide inputs to firms through the resource market(matket where households supply land, labor, capital, and entrepreneurship) in exchange for money(income or wages).

B.

Also in circular flow of income, firms receives expenditure from household and this type of market is called product market(which refers to a place where goods and services are bought and sold)

6 0
3 years ago
At the beginning of 2021, Brad’s Heating &amp; Air (BHA) has a balance of $24,800 in accounts receivable. Because BHA is a priva
NISA [10]

Answer:

  • 3. Calculate bad debt expense for 2021 and 2022 under the allowance method and under the direct write-off method, prior to any adjusting entries.
  • 2021

Under the Allowance Method    

Dr Bad Debt Expense $ 5.960  

Cr Allowance for Uncollectible Accounts  $ 5.960

Under the Direct Write-Off Method    

There aren't movements of writen-off accounts.

  • 2022

In 2022, customers’ accounts totaling $6,800 are written off as uncollectible.

Under the Direct Write-Off Method    

Dr Bad Debt Expense $ 6.800    

Cr Accounts Receivable   $ 6.800  

Under the Allowance Method    

3. Calculate bad debt expense for 2022 under the allowance method  

Dr Bad Debt Expense $ 5.440  

Cr Allowance for Uncollectible Accounts  $ 5.440

Explanation:

  • Initial Balance  

Dr Accounts Receivable   $ 24.800

  • During 2021, install air conditioning systems on account  

Dr Accounts Receivable  $ 178.000  

Cr Sales  $ 178.000

  • During 2021, collect $173,000 from customers on account.    

Dr Cash $ 173.000  

Cr Accounts Receivable   $ 173.000

  • 3. At the end of 2021, estimate that uncollectible accounts total 20% of ending accounts receivable.    

Dr Bad Debt Expense $ 5.960  

Cr Allowance for Uncollectible Accounts  $ 5.960

  • FINAL Balance 2021  

Dr Accounts Receivable  $ 29.800  

Cr Allowance for Uncollectible Accounts  $ 5.960

  • 4. In 2022, customers’ accounts totaling $6,800 are written off as uncollectible. Under the Allowance Method  

Dr Allowance for Uncollectible Accounts $ 6.800  

Cr Accounts Receivable   $ 6.800

  • 4. In 2022, customers’ accounts totaling $6,800 are written off as uncollectible. Under the Direct Write-Off Method  

Dr Bad Debt Expense $ 6.800  

Cr Accounts Receivable   $ 6.800

  • Sub TOTAL Balance 2022  

Dr Accounts Receivable  $ 23.000  

Dr Allowance for Uncollectible Accounts  $ 840

  • 3. Calculate bad debt expense for 2022 under the allowance method  

Dr Bad Debt Expense $ 5.440  

Cr Allowance for Uncollectible Accounts  $ 5.440

  • FINAL Balance 2022  

Dr Accounts Receivable  $ 23.000  

Cr Allowance for Uncollectible Accounts  $ 4.600

If the company applies the allowance method, it means that the account Allowance for Uncollectible Accounts must show as balance the % of accounts receivables as CREDIT.

Because the company has a debit balance in that account it's necessary to register an entry that compensate the DEBIT value and reflect A CREDIT estimated as % of account receivable.

Bad accounts are those credits granted by the company and there is no possibility of being charged.

When customers buy products on credits but the company cannot collect the debt, then it's necessary to cancel the unpaid invoice as uncollectible.

One way is to directly cancel bad debts at the time it was decided that the credit is bad, the total amount reported as bad debt expenses negatively affect the income statement and the accounts receivable are reduced by the same amount, less assets

The other way is to determine a percentage of the total amount of accounts receivable as bad debts, there are many ways to analyze accounts receivable and calculate the value of bad debts.

When the company has the percentage of uncollectible accounts, the required journal entry is Bad Expenses (debit) with Reserve for Bad Accounts (credit)

At the time of cancellation, since the expenses were recognized before, we only use the Allowance for Uncollectible Accounts (Debit)  with accounts receivable (credit), with this we are recognizing the bad credit of the company.

5 0
3 years ago
Suppose you've just inherited $10,000 from a relative. You're trying to decide whether to put the $10,000 in a non-interest-bear
Serggg [28]

Answer:

A. $800

B. $1,000

C. a. The quantity of money demanded decreases as the interest rate rises

Explanation:

A. Computation for the opportunity cost of holding the $10,000 as money if Interest Rate is 8%

Opportunity Cost for 8% interest rate=$8%*$10,000

Opportunity Cost for 8% interest rate= $800

Therefore the opportunity cost of holding the $10,000 as money if Interest Rate is 8% will be $800

B. Computation for the opportunity cost of holding the $10,000 as money if Interest Rate is 10%

Opportunity Cost for 10% interest rate =10%*$10,000

Opportunity Cost for 10% interest rate = $1,000

Therefore the opportunity cost of holding the $10,000 as money if Interest Rate is 10% will be $1,000

C. Based on the information given the previous analysis suggest about for money: THE QUANTITY OF MONEY DEMANDED DECREASES AS THE INTEREST RATE RISES.

6 0
3 years ago
An airplane manufacturer assembles a plane in one location and the workers and equipment go to the airplane when they need to wo
salantis [7]

Answer: c. fixed-position layout.

Explanation:

This is a system that addresses the layout requirements of stationary projects.

Here, project remains in one place and workers and equipment come to that one work area.

Examples are plane, ship, highway, a bridge, a house, and an operating table in a hospital, etc.

5 0
3 years ago
Read 2 more answers
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