Advanced Accounting
14th Edition
ISBN: 9781260247824
Author: Joe Ben Hoyle, Thomas F. Schaefer, Timothy S. Doupnik
Publisher: RENT MCG
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Chapter 14, Problem 18Q
When a partner withdraws from a
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In accounting for a withdrawal by payment from partnership assets, which statement is FALSE?
O The withdrawing partner may be paid using non-cash assets.
O Net assets will decrease
O Total capital will decrease.
O Asset revaluations should bx recorded.
What is the answer to this question?
When a partner withdraws from a partnership and the value of the assets paid tothe partner by the partnership is greater than the balance in his capital account, thepartnership is, in effect, paying the withdrawing partner a bonus. TRUE OR FALSE?
Chapter 14 Solutions
Advanced Accounting
Ch. 14 - Prob. 1QCh. 14 - Prob. 2QCh. 14 - Prob. 3QCh. 14 - Prob. 4QCh. 14 - Prob. 5QCh. 14 - Prob. 6QCh. 14 - Prob. 7QCh. 14 - Prob. 8QCh. 14 - Prob. 9QCh. 14 - Prob. 10Q
Ch. 14 - Prob. 11QCh. 14 - Prob. 12QCh. 14 - What is a partnership dissolution? Does...Ch. 14 - Prob. 14QCh. 14 - Prob. 15QCh. 14 - Prob. 16QCh. 14 - Prob. 17QCh. 14 - When a partner withdraws from a partnership, why...Ch. 14 - Prob. 1PCh. 14 - Prob. 2PCh. 14 - Prob. 3PCh. 14 - Prob. 4PCh. 14 - Prob. 5PCh. 14 - Prob. 6PCh. 14 - Prob. 7PCh. 14 - Prob. 8PCh. 14 - Prob. 9PCh. 14 - Prob. 10PCh. 14 - Prob. 11PCh. 14 - Prob. 12PCh. 14 - Prob. 13PCh. 14 - Prob. 14PCh. 14 - Prob. 15PCh. 14 - Prob. 16PCh. 14 - Prob. 17PCh. 14 - Prob. 18PCh. 14 - Prob. 19P
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- When a partnership is liquidated, any gains or losses realized by the sale of noncash assets are allocated to the partners based on their income sharing ratio. Why?arrow_forwardWhat accounting steps are taken by a partnership firm when a new partner is unable to bring the business guaranteed by him?arrow_forwardIn a partnership liquidation, if a partner has a debit capital balance in his or her capital account, he or she is responsible for contributing personal assets sufficient to eliminate the deficit. Group of answer choices True Falsearrow_forward
- Accounting for the admission of a new partner by purchase of a partner's interest will a b C O d not affect total assets, liabilities, and capital. increase total assets and total capital. increase total capital. decrease total capital.arrow_forwardIn the liquidating process, any uncollectible deficiency becomes a loss to the partnership and is divided among the remaining partners' capital balances based on their income-sharing ratio. True Falsearrow_forwardQuestions: What are the rules in distributing profits and losses? Is it valid to exclude a partner in the distribution of losses? Why? Why not?arrow_forward
- If the share of losses on realization of the sale of noncash assets exceed the balance in a partner's capital account, the resulting balance is called a deficiency. Group of answer choices True Falsearrow_forwardClaims against partners personal assets by creditors if the partnership can't pay its debts refers to? a liquidation differs from a dissolution in that in a liquidation?arrow_forwardAn entry is not required in the liquidation of a partnership to recor the * payment of cash to creditors. O distribution of cash to the partners. sale of noncash assets. allocation of a capital deficiency to partners with credit balances when the deficient partner is expected to pay the deficiency.arrow_forward
- Choose TRUE if the statement is correct, and FALSE if it is wrong. 1. There is no impact on the statement of comprehensive income of a partnership when a partner withdraws from the business. 2. The admission of a partner does not change the composition of the partners’ equity if the new partner purchases the old partner’s interest by paying the old partner directly. 3. A new partner cannot be admitted into a partnership without the consent of all the partners. 4. The dissolution of the partnership discharges the existing liability of any partner. 5. When a newly admitted partner pays a bonus to the existing partners, the new partner’s capital account is debited to record bonus to old partners. 6. Partnership dissolution is synonymous with partnership liqidation. 7. The assets invested into the partnership and not given to the individual partner increase the total assets of the partnership. 8. When a new partner invests more than the proportionate share he receives in the partnership,…arrow_forwardIn a partnership, a capital deficiency occurs for a partner when Options: • His share in the losses of the partnership is more than his capital balance • Loan payable by the partnership to him greater than his capital balance • His solvency is lesser than his capital balance • His personal assets are less than his personal liabilitiesarrow_forwardWhen the profit and loss agreement provides for the allowance of interest on partner's equity and salaries to partners, why are the partners entitled to these allowances even if the partnership operations results in a loss?arrow_forward
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