Which of the following statement is true regarding the admission of a new partner? a. New partner can gain admission by contributing assets to an existing partner. b. Using the bonus method, unrecognized asset appreciations are recognized. c. Using the goodwill method, only write-downs of the net assets are recognized. d. The admission of a new partner requires the approval of the creditor (e.g., bank).

Which of the following statement is true regarding the admission of a new partner? a. New partner can gain admission by contributing assets to an existing partner. b. Using the bonus method, unrecognized asset appreciations are recognized. c. Using the goodwill method, only write-downs of the net assets are recognized. d. The admission of a new partner requires the approval of the creditor (e.g., bank).

SWFT Corp Partner Estates Trusts

42nd Edition

ISBN:9780357161548

Author:Raabe

Publisher:Raabe

Chapter10: Partnerships: Formation, Operation, And Basis

Section: Chapter Questions

Problem 8DQ

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Question

Which of the following statement is true regarding the admission of a new partner?

a. New partner can gain admission by contributing assets to an existing partner.

b. Using the bonus method, unrecognized asset appreciations are recognized.

c. Using the goodwill method, only write-downs of the net assets are recognized.

d. The admission of a new partner requires the approval of the creditor (e.g., bank).

Definition Definition Intangible asset that includes proprietary or intellectual property and brand value of a firm. Goodwill is recorded in the books when a firm purchases another firm and the purchase price is more than the fair value of net identifiable assets of the acquired business. The amount of goodwill is recorded on the asset side of the balance sheet (statement of financial position).

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