Problems
117. Cinema Products LP is organized as a limited partnership that sells movie props. Information related to capital balances is given below. Compute the partner return on equity for each limited partner. How would each partner evaluate the success of the partnership? What would you recommend the partners do with respect to additional investments or withdrawals?
Turner
Kelly
Total
Capital balance, beginning of year
890,000
570,000
1,460,000
Net income for current year
85,000
65,000
150,000
Withdrawals for current year
40,000
25,000
118. Cinema Products LP is organized as a limited partnership that sells movie props. Information related to the capital balances is given below. Compute the partnership return on equity.
119. Caroline Meeks and Charlie Fox decide to form a partnership on August 1. Meeks invests the following assets and liabilities in the new partnership:
Market Value
Land.........................
$80,000
Building.......................
250,000
Note payable....................
114,000
The note payable is associated with the building and the partnership will assume responsibility for the loan. Fox invested $100,000 in cash and $95,000 in equipment in the new partnership. Prepare the journal entries to record the two partners’ original investments in the new partnership.
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