When a partner retires from the partnership and is given more cash than his adjusted capital, how should the difference be treated? Group of answer choices The difference should be credited to all remaining partners based on their remaining profit or loss ratio The difference should be debited to all remaining partners based on their remaining profit or loss ratio The difference should be accounted for as an additional partnership expense None of the above

When a partner retires from the partnership and is given more cash than his adjusted capital, how should the difference be treated? Group of answer choices The difference should be credited to all remaining partners based on their remaining profit or loss ratio The difference should be debited to all remaining partners based on their remaining profit or loss ratio The difference should be accounted for as an additional partnership expense None of the above

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter21: Partnerships

Section: Chapter Questions

Problem 5BCRQ

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18. A mode of settling the interest of a retiring partner that affects the partnership assets. A. Payment by an outsider B.Payment by any of the remaining partners. C.Proportional payment by all of the remaining partners D. Payment by the partnership E. Answer not given
If no agreement exists in a partnership as to the allocation of income, what method is appropriate? a. receives equal allocations. b. receives an amount equal to their contributions. c. receives amounts based on their balance in their partnership capital accounts. d. receives an amount equal to the losses.
Which is true regarding admission of a new partner accounted for under the bonus method? * a. The total net assets of the new partnership would be the same as that of the old partnership. b. The new partner’s initial capital would be equal to his or her initial investment. c. Assuming that the recorded assets are properly valued, the net assets of the new partnership would be equal to the net assets of the old partnership plus the investment of the new partner. d. The old partners’ capital account would be the same.
no need to explain: The following transactions will affect the balance of the total partnership capital except a. retirement of a partner by paying an amount equal to his interest b. the partnership incurred net loss for the year c. admission by purchase with bonus d. permanent retirement by partners Upon dissolution, the partners may adjust the partnership assets and liabilities. The net effect of such restatement must be distributed to the partners based on their a. ending capital balances b. old profit and loss ratio c. new profit and loss ratio d. beginning capital balances
19 A partners retires from the partners and receives an amount higher than his capital balance at the time of his retirement. Under Philippine GAAP, which of the following explanation is valid if the capital balances of the remaining partners increase after such retirement? Group of answer choices a. Goodwill arising from partner's retirement has been recognized. b. Bonus has been given by remaining partners to retiring partner. c. Bonus has been given by the retiring partner to the remaining partners. d. Asset revaluation has been recognized at the time of retirement.
Assume a partner withdraws from a partnership and receives assets of greater value than the book value of his equity. Should the remaining partners share the resulting reduction in their equities in the ratio of their relative capital balances or according to their income-and-loss-sharing ratio?
Multiple Choice Instruction: Encircle the letter of the corresponding correct answer. 1. When a new partner is admitted in an existing partnership either by purchase of interest or by investment, which of the following statement is true? a. the partnership book is required to be changed with a new one b. bonus should be recorded c. the partnership's non-cash assets should be adjusted to conform with their fair market values d. both requires to undergo the liquidation process 2. When bonus is given to the old partners- a. old partners' capital accounts are credited b. the bonus is divided based on P/L Ratio new partners' capital account is debited d. all of the above C.
18. If the partnership agreement does not specify how income is to be allocated among the partners, profits should be allocated: a. In accordance with some pre-established ratio b. In proportion to the weighted average of capital invested during the period c. Equally d. Equitably so that the partners are compensated for the time and effort expended on behalf of the partnership
Withdrawal of Partner Lane Stevens is to retire from the partnership of Stevens and Associates as of March 31, the end of the current fiscal year. After closing the accounts, the capital balances of the partners are as follows: Lane Stevens, $150,000; Cherrie Ford, $70,000; and LaMarcus Rollins, $60,000. They have shared net income and net losses in the ratio of 3:2:2. The partners agree that the merchandise inventory should be increased by $22,300 and the allowance for doubtful accounts should be increased by $1,300. Stevens agrees to accept a note for $100,000 in partial settlement of his ownership equity. The remainder of his claim is to be paid in cash. Ford and Rollins are to share equally in the net income or net loss of the new partnership. a. Journalize the entry to record the adjustment of the assets to bring them into agreement with current market prices. If an amount box does not require an entry, leave it blank. b. Journalize the entry to record the withdrawal of Stevens…
17. When a partner dies or withdraw from the partnership, his capital in the partnership must be adjusted for the following, before settlement, except: A. Share in the net income of the partnership till the date of death or withdrawal B. Share in the adjustment of partnership assets to their fair values at date of death or withdrawal C. Share in adjustment of partnership liabilities to their fair values at date of death or withdrawal D. None of the above. E. Answer not given
Heginio Lacson, Joel Jo, and Alex Ajoc are partners who shared profit and losses of 30%, 50%, and 20%, respectively. Jo decides to withdraw from the partnership. Their respective capital account balances after partnership s books have been adjusted, as follows: Heginio Lacson P60,000 Joel Jo P85,000 Alex Ajoc P55,000 Required: 1. Prepare journal entry to record the withdrawal of Joel Jo from the partnership under the following assumptions: Alex Ajoc buys his share for P90,000. b. Heginio Lacson buys his share and4 by Alex Ajoc. Marco Ocenar, and outsider buys his interest for P80,000. a. C. Assumption a: Assumption b: Assumption c:
Which of these is not an expense of a partnership in determining profit for the period? O Freight-out Salary allowance to partners Supplies used Expired insurance