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The partnership contract for Hanes and Jones LLP provides that Hanes is to receive a bonus of 20% of net income (after the bonus) and that the remaining net income is to be divided equally. If the partnership income before the bonus for the year is $57,600, Hanes’ share of this pre-bonus income is

Levinson Company established a subsidiary in Mexico on January 1, 2024. The subsidiary engaged in the following transactions during 2024: January 1 Sold common stock to Levinson for 7,500,000 pesos.   Purchased inventory throughout the year, 10,000,000 pesos. (¼ of the inventory remained at year end.)   Sales for the year totaled 14,000,000 pesos. December 31 Purchased equipment for 1,500,000 pesos. Levinson concluded that the subsidiary’s  functional currency was the dollar. Exchange rates for 2024 were: January 1 1 peso = $ 0.23 January 31 1 peso = $ 0.21 December 31 1 peso = $ 0.17 Weighted average rate for the year 1 peso = $ 0.20 What amount of foreign exchange gain or loss would have been recognized in Levinson’s consolidated income statement for 2024? $825,000 gain $685,000 gain $270,000 loss $570,000 loss $315,000 loss

McCoy has the following account balances as of December 31, 2023, before an acquisition transaction takes place. Inventory $ 125,000 Land 450,000 Buildings 575,000 Liabilities (590,000) Common stock ($10 par) (75,000) Additional Paid-In Capital (200,000) Retained earnings (12/31/23) (285,000) The fair value of McCoy’s Land and Buildings are $650,000 and $600,000, respectively. On December 31, 2023, Ferguson Company issues 30,000 shares of its $10 par value ($30 fair value) common stock in exchange for all of the shares of McCoy’s common stock. Ferguson paid $12,000 for costs to issue the new shares of stock. Before the acquisition, Ferguson has $800,000 in its common stock account and $350,000 in its additional paid-in capital account.On December 31, 2023, assuming that McCoy will retain its separate corporate existence, what value is assigned to Ferguson’s investment account? $150,000 $300,000 $600,000 $900,000 $912,000

Gale Company was formed on January 1, 2024 as a wholly owned foreign subsidiary of a U.S. corporation. Gale’s functional currency was the stickle (). The following transactions and events occurred during 2024: January 1 Gale issued common stock for §2,000,000. June 30 Gale paid dividends of §50,000. December 31 Gale reported net income of §120,000 for the year. Exchange rates for 2024 were: January 1 $ 1 = § 0.50 June 30 $ 1 = § 0.47 December 31 $ 1 = § 0.44 Weighted average rate for the year $ 1 = § 0.46 What exchange rate should have been used in translating Gale’s revenues and expenses for 2024? $1 = 0.50 $1 = 0.46 $1 = 0.47 $1 = 0.44 $1 = 0.48

When Danny withdrew from John, Daniel, Harry, and Danny, LLP, he was paid $80,000, although his capital account balance was only $60,000. The four partners shared net income and losses equally, and no revaluation will take place. The journal entry to record the effect on John’s capital due to Danny’s withdrawal would include

On January 2, 2024, Barley Corporation purchased 40% of the voting common stock of Wheat Company, paying $3,000,000. Barley properly accounts for this investment using the equity method. At the time of the investment, Wheat’s total stockholders’ equity was $5,000,000. Barley gathered the following information about Wheat’s assets and liabilities whose book values and fair values differed:   Book Value Fair Value Buildings (20-year life) $ 1,000,000 $ 1,800,000 Equipment (5-year life) 1,500,000 2,000,000 Franchises (10-year life) 0 700,000 Any excess of cost over fair value was attributed to goodwill, which has not been impaired. Wheat reported net income of $400,000 for 2024, and paid dividends of $200,000 during that year.What is the amount of excess amortization expense for Barley’s investment in Wheat for the first year?

Jerry, a partner in the JSK partnership, begins the year on January 1, 2024, with a capital balance of $20,000. The JSK partnership agreement states that Jerry receives 6% interest on his monthly weighted average capital balance without regard to normal drawings. Each partner draws $5,000 in cash from the business every quarter. Any withdrawal in excess of that will be accounted for as a direct reduction of the partner’s capital balance. On March 1, 2024, when the partnership tax return for 2023 was completed, Jerry’s capital account was credited for his share of 2023 profit of $120,000. Jerry withdrew $5,000 quarterly, beginning March 31st. On September 1, Jerry’s capital account was credited with a special bonus of $60,000 for business he brought to the partnership. What amount of interest will be attributed to Jerry for the year 2024 that will go toward his profit distribution for the year?

Gale Company was formed on January 1, 2024, as a wholly owned foreign subsidiary of a U.S. corporation. Gale’s functional currency was the stickle (). The following transactions and events occurred during 2024: January 1 Gale issued common stock for §2,000,000. June 30 Gale paid dividends of §50,000. December 31 Gale reported net income of §120,000 for the year. Exchange rates for 2024 were: January 1 $ 1 = § 0.50 June 30 $ 1 = § 0.47 December 31 $ 1 = § 0.44 Weighted average rate for the year $ 1 = § 0.46 What was the amount of the translation adjustment for 2024? $121,500 positive translation adjustment $121,500 negative translation adjustment $120,900 positive translation adjustment $120,900 negative translation adjustment $152,200 positive translation adjustment

The Keller, Long, and Mason partnership had the following balance sheet just before entering liquidation: Cash $ 115,000 Liabilities $ 45,000 Noncash assets 230,000 Keller, Capital 100,000     Long, Capital 70,000     Mason, Capital 130,000 Total $ 345,000 Total $ 345,000 Keller, Long, and Mason share profits and losses in a ratio of 2:4:4.Assume that noncash assets were sold for $60,000 and liquidation expenses in the amount of $18,500 were incurred. If Long was personally insolvent and could not contribute any assets to the partnership, and Keller and Mason were both solvent, what amount of cash would Keller receive from the distribution of partnership assets?  

Clark Stone purchases raw material from its foreign supplier, Rinne Clay, on May 8. Payment of 1,500,000 foreign currency units (FC) is due in 30 days. May 31 is Clark’s fiscal year-end. The applicable exchange rates were as follows: Date Spot Rate May 8 $ 1.16 May 31 $ 1.18 June 7 $ 1.12 How much Foreign Exchange Gain or Loss should Clark record on May 31? $0 $30,000 gain $30,000 loss $60,000 gain $60,000 loss