Palit buys Quincy's partnership interest in the Q-R-S partnership. Quincy thus retires, leaving Reale and Susien as Palit's co-partners. Prior to Palit entering the partnership, Quincy, Reale, and Susien split profits and losses equally. Palit pays P75,000 for Quincy's capital which, at the time, totaled P60,000. No revaluation of partnership assets or liabilities occurs at the time. In recording this event on the partnership books a. Goodwill is booked based on the book value/fair value difference. b. P7,500 bonuses are added to Reale and Susien capital. c. P5,000 bonuses are added to Quincy, Real, and Susien capital. d. Palit capital is created in the amount of P60,000.
Palit buys Quincy's partnership interest in the Q-R-S partnership. Quincy thus retires, leaving Reale and Susien as Palit's co-partners. Prior to Palit entering the partnership, Quincy, Reale, and Susien split profits and losses equally. Palit pays P75,000 for Quincy's capital which, at the time, totaled P60,000. No revaluation of partnership assets or liabilities occurs at the time. In recording this event on the partnership books a. Goodwill is booked based on the book value/fair value difference. b. P7,500 bonuses are added to Reale and Susien capital. c. P5,000 bonuses are added to Quincy, Real, and Susien capital. d. Palit capital is created in the amount of P60,000.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Palit buys Quincy's partnership interest in the Q-R-S partnership. Quincy thus retires, leaving Reale and Susien as Palit's co-partners. Prior to Palit entering the partnership, Quincy, Reale, and Susien split profits and losses equally. Palit pays P75,000 for Quincy's capital which, at the time, totaled P60,000. No revaluation of partnership assets or liabilities occurs at the time. In recording this event on the partnership books
a. Goodwill is booked based on the book value/fair value difference.
b. P7,500 bonuses are added to Reale and Susien capital.
c. P5,000 bonuses are added to Quincy, Real, and Susien capital.
d. Palit capital is created in the amount of P60,000.
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