EBK ADVANCED FINANCIAL ACCOUNTING
11th Edition
ISBN: 8220102796096
Author: Christensen
Publisher: YUZU
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Question
Chapter 15, Problem 15.12Q
To determine
New partners investment:a new partner acquires a share in partnership by investing in the business in the form of cash or other assets. There are three possible cases when a new partner invests in partnership.
- The new partner investment equals the new partner’s proportional share in partnership’s book value.
- The new partner’s investment is more than the new partner’s proportion of partnership’s book value. This indicates that the partnership assets were undervalued or a unrecorded
goodwill exists. - The new partner’s investment is less than his proportional share in partnership book value. This suggests that the partnership assets were overvalued on its books or the new partner may be contributing goodwill in addition to other assets.
The case in which new partner’s capital credit is less than, more than or equal to the amount invested by him.
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Chapter 15 Solutions
EBK ADVANCED FINANCIAL ACCOUNTING
Ch. 15 - Prob. 15.1QCh. 15 - Prob. 15.2QCh. 15 - Prob. 15.3QCh. 15 - Prob. 15.4QCh. 15 - Under what circumstances would a partner’s capital...Ch. 15 - Prob. 15.6QCh. 15 - Prob. 15.7QCh. 15 - Prob. 15.8QCh. 15 - Prob. 15.9QCh. 15 - Prob. 15.10Q
Ch. 15 - Prob. 15.11QCh. 15 - Prob. 15.12QCh. 15 - Prob. 15.13QCh. 15 - Prob. 15.14QCh. 15 - Prob. 15.15AQCh. 15 - Prob. 15.16BQCh. 15 - Prob. 15.1CCh. 15 - Prob. 15.2CCh. 15 - Prob. 15.3CCh. 15 - Prob. 15.1.1ECh. 15 - Prob. 15.1.2ECh. 15 - Prob. 15.1.3ECh. 15 - Prob. 15.1.4ECh. 15 - Multiple-Choice on Initial Investment [AICPA...Ch. 15 - Prob. 15.2ECh. 15 - Prob. 15.3ECh. 15 - Prob. 15.4ECh. 15 - Prob. 15.5ECh. 15 - Prob. 15.6ECh. 15 - Prob. 15.7ECh. 15 - Prob. 15.8.1ECh. 15 - Prob. 15.8.2ECh. 15 - Prob. 15.8.3ECh. 15 - Prob. 15.8.4ECh. 15 - Prob. 15.8.5ECh. 15 - Prob. 15.8.6ECh. 15 - Prob. 15.8.7ECh. 15 - Prob. 15.8.8ECh. 15 - Prob. 15.9ECh. 15 - Retirement of a Partner On January 1, 20X1, Eddy...Ch. 15 - Prob. 15.11PCh. 15 - Prob. 15.12PCh. 15 - Prob. 15.13PCh. 15 - Prob. 15.14PCh. 15 - Withdrawal of a Partner under Various Alternatives...Ch. 15 - Prob. 15.16.1PCh. 15 - Prob. 15.16.2PCh. 15 - Prob. 15.16.3PCh. 15 - Prob. 15.16.4PCh. 15 - Prob. 15.16.5PCh. 15 - Prob. 15.16.6PCh. 15 - Prob. 15.16.7PCh. 15 - Prob. 15.16.8PCh. 15 - Prob. 15.16.9PCh. 15 - Prob. 15.17PCh. 15 - Initial investments and Tax Bases [AICPA Adapted]...Ch. 15 - Prob. 15.19P
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Similar questions
- Can a partnership assume liabilities as part of one of the partners contributions?arrow_forward1. Describe how loans receivable from partners and loans payable to partners are treated in liquidation and why is that necessary? 2.arrow_forwardAccounting 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_forward
- determine whether an allocation had a substantial economic effect on the partners, the courts have long inquired whether the allocation was reflected by an appropriate adjustment in the partners’ capital accounts?arrow_forwardA partner's withdrawal of assets from a LLP that is considered a permanent reduction in that partner's equity is debited to the partner's: Select one :- a. Retained Earnings account b. Loan Receivable account c. Drawing account d. Capital accountarrow_forwardHow may the capital deficiency of an insolvent partner can be eliminated?arrow_forward
- Which is NOT CORRECT when the Capital Adjustment account is used in the recording of partnership revaluation? We credit Capital Adjustment when we increase the value of Land. We debit Capital Adjustment when we increase the value of Furniture and Fixture We credit Capital Adjustment when we decrease the value of Notes Payable. We debit Capital Adjustment when we increase the value of Accounts Payable.arrow_forward12.To compensate the partners for the difference in capital contributions, they may include which of the following in their profit or loss sharing agreement? * -ratio based on capital -interest and salaries -interest and bonus -interest and ratio based on capital -answer not givenarrow_forwardIn a case where parties agreed on the conversion of the loan into shares in a partnership and yet the new loan remained despite the conversion, is there novation?arrow_forward
- 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.arrow_forwardIf total contributed capital is equal to total agreed capital with the new partner's investment is less than his capital credit, then the admission of the new partner involvesarrow_forwardA capital deficiency can be eliminated by the following except A.Offsetting against a partner’s loan B.Additional investment C.Selling non cash assets at a gain D.Loss to the other partnersarrow_forward
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