Short Questions
91. Active Sports LP is organized as a limited partnership consisting of two partners: Basketball Products LP and Hockey Products LP. Each of the partners sell sporting equipment for their respective sports. Compute the partner return on equity for each limited partnership and for the total limited partnership for the year ended September 30, 2013, using the following data:
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Basketball Products LP
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Hockey Products LP
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Active Sports LP
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Capital balance at 10/1/12
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$870,000
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$580,000
|
$1,450,000
|
Net income
|
65,000
|
35,000
|
100,000
|
Cash distribution
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(40,000)
|
(25,000)
|
(65,000)
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Capital balance at 9/30/13
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$895,000
|
$590,000
|
$1,485,000
|
92. Kathleen Reilly and Ann Wolf decide to form a partnership on August 1. Reilly invested the following assets and liabilities in the new partnership:
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Cost/Book Value
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Market Value
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Land
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$75,000
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$100,000
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Building
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$250,000
|
$300,000
|
Note Payable
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$198,000
|
$198,000
|
The note payable is associated with the building and the partnership will assume the responsibility for the loan. Wolf invested $60,000 in cash and $105,000 in new equipment in the new partnership. Prepare the journal entries to record the two partner’s original investments in the new partnership.
93. Sierra and Jenson formed a partnership. Sierra contributed $25,000 cash and accounts receivable worth $11,000. Jenson's investment included cash, $5,000; inventory, $18,000; and supplies, $1,000. Prepare the journal entries to record each partner's investment in the new partnership.
94. Arthur, Barnett and Cummings form a partnership. Arthur contributes $250,000 cash and Barnett contributes $230,000 in cash. Cummings contributes equipment worth $255,000. Prepare the single journal entry to record the formation of this partnership.