Advanced Financial Accounting
Advanced Financial Accounting
12th Edition
ISBN: 9781259916977
Author: Christensen, Theodore E., COTTRELL, David M., Budd, Cassy
Publisher: Mcgraw-hill Education,
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Chapter 15, Problem 15.16.1P
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.

  1. The new partner investment equals the new partner’s proportional share in partnership’s book value.
  2. 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.
  3. 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

To choose:the correct answer to determine amount to be credited to partner’s when property other than cash is invested by him.

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Dharma Chemical Inc. placed 195,000 liters of direct materials into the mixing process. At the end of the month, 9,000 liters were still in process, 40% converted as to labor and factory overhead. All direct materials are placed in mixing at the beginning of the process and conversion costs occur evenly during the process. Dharma uses weighted-average costing. Determine the equivalent units in process for direct materials, assuming that 16,000 liters of chemicals were 40% complete prior to the addition of the 195,000 liters
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