TRUE or FALSE The accounting for partnerships differs from the accounting for sole proprietorships, corporations and cooperatives in regard to the accounting for equity but not for assets and liabilities. A partnership is relatively easy to form but also easy to dissolve. Ms. A contributed equipment with carrying amount of P100 and fair value of P200 to a partnership. If no bonus is given to any partner, Ms. A's capital account should be credited for P200. Fact pattern: Mr. Debinsky contributed inventory with purchase cost of P300 and net realizable value of P350 to a partnership. Mr. Debinsky acquired the inventory on account and the partnership will assume the unpaid balance of P80. 4. The partnership will record the inventory at P350. 5. Mr. Debinsky's capital account in the partnership books will be credited for P270. Fact pattern: Mr. B and Ms. C formed a partnership. The partners have equal interests in the partnership and their respective contributions shall reflect this fact. The agreed initial partnership capital is P300. Mr. B contributed P100, while C contributed P150.
Partnership Accounting
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings, admission of a new partner, etc.
Partner Admission and Withdrawal
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings of a partner, etc.
TRUE or FALSE
- The accounting for partnerships differs from the accounting for sole proprietorships, corporations and cooperatives in regard to the accounting for equity but not for assets and liabilities.
- A partnership is relatively easy to form but also easy to dissolve.
- Ms. A contributed equipment with carrying amount of P100 and fair value of P200 to a partnership. If no bonus is given to any partner, Ms. A's capital account should be credited for P200.
Fact pattern:
Mr. Debinsky contributed inventory with purchase cost of P300 and net realizable value of P350 to a partnership. Mr. Debinsky acquired the inventory on account and the partnership will assume the unpaid balance of P80.
4. The partnership will record the inventory at P350.
5. Mr. Debinsky's capital account in the partnership books will be credited for P270.
Fact pattern:
Mr. B and Ms. C formed a partnership. The partners have equal interests in the partnership and their respective contributions shall reflect this fact. The agreed initial partnership capital is P300. Mr. B contributed P100, while C contributed P150.
6. Mr. B should contribute additional P50.
7. Ms. C should withdraw P50.
8. Ms. D and Mr. E formed a partnership, each contributing P50. Because Ms. D will be bringing special skill to the business, the partners agreed that Ms. D's capital account should be credited for P70. Mr. E's capital balance after the partnership formation is P30.
Fact pattern:
Piw and Pie agreed to form a partnership. Piw contributed cash of P200 while Pie will be contributing her expertise. The partnership agreement stipulates that Piw and Pie shall have equal interests in both the initial capital of the partnership and in subsequent partnership
9. The cash contribution of Piw shall be debited for P200 but the net credit to Piw's capital account shall be P100.
10. Immediately after partnership formation, the balance of Pie's capital account in the partnership books is zero.
I answered all of the above but I need to know if my answers were correct, here is my own answer:
- T
- T
- T
- F
- F
- T
- F
- T
- F
- T
Let me know if I have mistakes, I am willing to learn. Thankiee
Trending now
This is a popular solution!
Step by step
Solved in 4 steps
