ADV.FIN.ACCT.LL W/CONNECT+PROCTORIO PLUS
ADV.FIN.ACCT.LL W/CONNECT+PROCTORIO PLUS
12th Edition
ISBN: 9781266380570
Author: Christensen
Publisher: MCG
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Chapter 15, Problem 15.16.2P
To determine

Partnership agreementincludes all the terms and conditions on which partnership works, each partner signs the partnership agreement to indicate acceptance of this terms.

The partnership agreement includes the following terms:

  1. The name of the partnership and names of partner’s
  2. Type of business conducted by partnership
  3. Initial capital contribution of each partner and method of accounting for future capital contribution.
  4. Terms of profit and loss distribution, including salaries, interest on capital, bonuses, limits on withdrawals and manner of distribution of residual profit.
  5. Procedures used for changes in partnership, such as admission of new partner and retirement of partner.
  6. Other aspects such as management rights and election procedures and accounting method used.

To choose:The correct answer to determine amount to be recorded as capital for W and M at the partnership formation.

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Recently, Abercrombie & Fitch has been implementing a turnaround strategy since its sales had been falling for the past few years (11% decrease in 2014, 8% in 2015, and just 3% in 2016.) One part of Abercrombie's new strategy has been to abandon its logo-adorned merchandise, replacing it with a subtler look. Abercrombie wrote down $20.6 million of inventory, including logo-adorned merchandise, during the year ending January 30, 2016. Some of this inventory dated back to late 2013. The write-down was net of the amount it would be able to recover selling the inventory at a discount. The write-down is significant; Abercrombie's reported net income after this write-down was $35.6 million. Interestingly, Abercrombie excluded the inventory write-down from its non-GAAP income measures presented to investors; GAAP earnings were also included in the same report. Question: What impact would the write-down of inventory have had on Abercrombie's assets, Liabilities, and Equity?
Need answer general Accounting
Provide correct answer of this question answer general Accounting
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