1) C is admitted in the partnership of A and B by investing P120,000 for an interest equal to P150,000. Assuming that the net assets of the partnership prior to C's admission are fairly valued, this transaction would result in A. a decrease of P30,000 in the total partnership assets B. a decrease in the capital balances of A and B C. an increase in the capital balances of A and B D. the recognition of goodwill by the partnership 2) A partnership records the admission of a new partner through purchase of interest by crediting the purchaser's capital and debiting A. capital account of other partners B. bonus account C. cash account D. capital account of the selling partner
1) C is admitted in the partnership of A and B by investing P120,000 for an interest equal to P150,000. Assuming that the net assets of the partnership prior to C's admission are fairly valued, this transaction would result in A. a decrease of P30,000 in the total partnership assets B. a decrease in the capital balances of A and B C. an increase in the capital balances of A and B D. the recognition of goodwill by the partnership 2) A partnership records the admission of a new partner through purchase of interest by crediting the purchaser's capital and debiting A. capital account of other partners B. bonus account C. cash account D. capital account of the selling partner
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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1) C is admitted in the partnership of A and B by investing P120,000 for an interest
equal to P150,000. Assuming that the net assets of the partnership prior to C's
admission are fairly valued, this transaction would result in
A. a decrease of P30,000 in the total partnership assets
B. a decrease in the capital balances of A and B
C. an increase in the capital balances of A and B
D. the recognition of
2) A partnership records the admission of a new partner through purchase of interest by
crediting the purchaser's capital and debiting
A. capital account of other partners
B. bonus account
C. cash account
D. capital account of the selling partner
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