A company has bonds outstanding with a par value of $100,000.
The unamortized discount on these bonds is $4,500. The company
retired these bonds by buying them on the open market at 97. What
is the gain or loss on this retirement?
Select one:
a. $1,500 gain.
b. $3,000 gain
c. $0 gain or loss.
d. $1,500 loss.
Partners Ana, Beth, and Cathy have capital account balances of
$90,000 each. The income and loss ratio is 5:2:3, respectively. In
the process of liquidating the partnership, noncash assets with a
book value of $75,000 are sold for $30,000. The balance of Ana’s
Capital account after the sale is
Select one:
a. $67,500.
b. $99,000.
c. $76,500.
d. $81,000.
Please Solve As soon as
Solve quickly I get you two UPVOTE directly
Thank's
Abdul-Rahim Taysir
Sol 1 - The calculation of the above is as follows-
Given,
Par value of bonds = $100,000
Unamortized discount = $4,500
Carrying value = $100,000 - $4,500
= $95,500
Loss/gain = ($100,000 * 0.97) - $95,500
Loss = $1,500
Therefore, the correct option is (d) $1,500 loss
Sol - 2 The solution is as follows
Loss on sale of non cash asset = $75,000 - $30,000
= $45,000
Ana capital before sale = $90,000
Ana share in loss = $45,000 * 5/10 = $22,500
Ana capital after the sale is = $90,000 - $22,500 = $67,500
Therefore, the correct option is (a) that is $67,500
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