A Statement of financial position for Lustre and Pressman, prepared on March 31, appears below. Partners...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
A Statement of financial position for Lustre and Pressman, prepared on March 31, appears below. Partners share earnings and losses in the ratio of 3:1, respectively. Lustre and Pressman Statement of Financial Position March 31, 2023 Assets Cash Accounts Receivable Less: Allowance for Uncollectible Accounts Inventories Equipment Less: Accumulated Depreciation Goodwill Total Assets Liabilities and Equity Accounts Payable Lustre, Capital Pressman, Capital Total Liabilities and Owner's Equity An appraisal of the assets discloses the following fair values: Inventories Equipment 42,000 124,000 12,000 112,000 206,000 600,000 160,000 440,000 296,000 520,000 100,000 900,000 Lustre and Pressman, together with other three friends, decided to incorporate as SUPERSTAR CORP. with 50,000 authorized shares of P50 par ordinary share capital. The three other incorporators acquired 10,000 shares at P70. Lustre and Pressman received 14,000 shares in exchange for the net assets of the partnership except for cash. On this date, the fair value of Stock is P70 per share. Lustre agrees to take 7,500 shares and Pressman, 6,500 shares. The partnership cash is then appropriately divided between the partners. 104,000 394,000 402,000 900,000 Instructions: State the needed steps and give the entries to record the above on the books of the partnership and on the new books of the corporation. A Statement of financial position for Lustre and Pressman, prepared on March 31, appears below. Partners share earnings and losses in the ratio of 3:1, respectively. Lustre and Pressman Statement of Financial Position March 31, 2023 Assets Cash Accounts Receivable Less: Allowance for Uncollectible Accounts Inventories Equipment Less: Accumulated Depreciation Goodwill Total Assets Liabilities and Equity Accounts Payable Lustre, Capital Pressman, Capital Total Liabilities and Owner's Equity An appraisal of the assets discloses the following fair values: Inventories Equipment 42,000 124,000 12,000 112,000 206,000 600,000 160,000 440,000 296,000 520,000 100,000 900,000 Lustre and Pressman, together with other three friends, decided to incorporate as SUPERSTAR CORP. with 50,000 authorized shares of P50 par ordinary share capital. The three other incorporators acquired 10,000 shares at P70. Lustre and Pressman received 14,000 shares in exchange for the net assets of the partnership except for cash. On this date, the fair value of Stock is P70 per share. Lustre agrees to take 7,500 shares and Pressman, 6,500 shares. The partnership cash is then appropriately divided between the partners. 104,000 394,000 402,000 900,000 Instructions: State the needed steps and give the entries to record the above on the books of the partnership and on the new books of the corporation.
Expert Answer:
Answer rating: 100% (QA)
Answer Answer To record the conversion of the partnership Lustre and Pressman into Superstar Corp th... View the full answer
Related Book For
Principles Of Taxation For Business And Investment Planning 2016 Edition
ISBN: 9781259549250
19th Edition
Authors: Sally Jones, Shelley Rhoades Catanach
Posted Date:
Students also viewed these accounting questions
-
Ryland Company, a calendar year taxpayer, purchased commercial realty for $2 mil-lion and allocated $200,000 cost to the land and $1.8 million cost to the building. Ryland placed the real estate in...
-
A bakery with a December 31 st year end purchased new equipment on October 31 st 2000 for $10,000. This was their first equipment purchase. Required: What are the tax consequences if the equipment is...
-
On June 28, 2014, in relocating to a new town, Kerr Corp. purchased a property consisting of two hectares of land and an unused building for $225,000 plus property taxes in arrears of $4,500. The...
-
Kevin Steven opened a small tax-preparation service. Steven Tax Services trial balance at the end of its second year of operation is as follows. The following information is also available: a. Office...
-
Why are natural resources called wasting assets?
-
Scope _____ is often achieved by a customer inspection and then sign-off on key deliverables. a. acceptance b. validation c. completion d. close-out
-
A reactor is to be designed for the oxidation of sulfur dioxide, with excess oxygen from air, to sulfur trioxide. The entering feed, at \(550 \mathrm{~K}\) and \(1.1 \mathrm{bar}\), consists of...
-
Asset recognition and measurement The hypothetical transactions listed next relate to Ryanair Holdings. Plc. (Ryanair), an Irish airline. Indicate whether each transaction immediately gives rise to...
-
Leadership is an integral element in any job, regardless of the work title. However, it is important to recognize that leadership is not just one single skill; instead, success in leadership depends...
-
Ziggy's Inc. is a retailer of highly specialized clothing that opened for business on May 1, 2014, in a leased store in a strip mall. A condensed income statement for Ziggy's Inc. for its year, ended...
-
You have the following data, knowing that it is a total of Baghdad Airport / for a month 7/2020 50,000 shekels local sales 100,000 shekels sales abroad 20,000 shekels Israeli sales 60,000 shekels of...
-
1. Define 5D in your own words. If it was defined as an operation that uses "trochoidal passes with a big and tightly controlled maximal radial engagement", what operation is being referred to? 2. Is...
-
Evaluate the integral. 4x+5 So 2x2+5x+1 dx
-
Pierre has a credit card used exclusively for his unincorporated consulting business. During the current year, he pays $2,000 in interest, a $95 annual fee, and $150 in late charges. What is his...
-
Find dy/dx using implicit differentiation. You must show all your work for any credit. 2x+3y-7 In(x + y) ) Evaluate the derivative. You must show all you work for any credit. Your final answer must...
-
At what point would you introduce the presentation aid? How would you use it to enhance your presentation? Are there any special considerations you should take into consideration when preparing to...
-
A friend who has extensive experience using Sage 50 advised the treasurer for Love It Again to number the accounts with gaps between successive accounts (1000, 1020, 1040, 1060, etc.). a. Explain why...
-
Express mass density in kg/m3 and weight density in lb/ft3. 1. Find the mass density of a chunk of rock of mass 215 g that displaces a volume of 75.0 cm3 of water. 2. A block of wood is 55.9 in. x...
-
Corporation R signed a contract to undertake a transaction that will generate $360,000 total cash to the corporation. The cash will represent income in the year received and will be taxed at 35...
-
Aqua, a South Carolina corporation, is a 20 percent partner in a Swiss partnership. This year, Aqua earned $2 million U.S. source income and $190,000 foreign source income. It paid no foreign income...
-
Company Y began business in February 2015. By the end of the calendar year, it had billed its clients for $3.5 million of services and had incurred $800,000 of operating expenses. As of December 31,...
-
Temperature is an intensive property. State True (T) or False (F)
-
Kinetic energy is an extensive property. State True (T) or False (F)
-
A nozzle represents an open system. State True (T) or False (F)
Study smarter with the SolutionInn App