ADVANCED FINANCIAL ACCOUNTING IA
12th Edition
ISBN: 9781260545081
Author: Christensen
Publisher: MCG
expand_more
expand_more
format_list_bulleted
Concept explainers
Question
Chapter 15, Problem 15.16.3P
To determine
Bonus method:This method records an increase in the partnership’s total capital only to the extent of investment of new partner in accordance with GAAP. In some cases, the existing partner assign some of their capital to a new partner, and in some cases, a new partner agrees to assign a portion of his or her capital interest to the existing partners.
To choose:the correct answer to determine amount to be recorded as capital for W and M at the partnership formation.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Required information
[The following information applies to the questions displayed below.]
Ramer and Knox began a partnership by investing $60,000 and $90,000, respectively. During its first year, the partnership
earned $160,000. Prepare calculations showing how the $160,000 income is allocated under each separate plan for
sharing income and loss.
2. The partners agreed to share income and loss in proportion to their initial investments. Net income is $160,000.
Note: Do not round intermediate calculations.
Fraction to Allocate
Ramer
Ramer's Share Fraction to Allocate Knox's Share of Total Income
of Income
Knox
Income
Allocated
$125,000 / $50,000
$125,000/ $75,000
$50,000/ $125,000
$50,000/ $75,000
$
0
Required information
[The following information applies to the questions displayed below.]
Ramer and Knox began a partnership by investing $60,000 and $90,000, respectively.
During its first year, the partnership earned $160,000. Prepare calculations showing how the
$160,000 income is allocated under each separate plan for sharing income and loss.
2. The partners agreed to share income and loss in proportion to their initial investments. Net income is
$160,000.
Note: Do not round intermediate calculations.
Fraction to
Allocate Ramer
$60,000/ $150,000
X Answer is complete but not entirely correct.
Ramer's
Share of
Income
$ 160,000 X
Fraction to
Allocate Knox
$90,000/
$150,000
$
Knox's
Share of
Income
160,000
Total
Income
Allocated
$
320,000
Please answer question completely. This is one question with two parts so answer question fully ( part a and b)
Chapter 15 Solutions
ADVANCED FINANCIAL ACCOUNTING IA
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 - Prob. 15.18PCh. 15 - Initial investments and Tax Bases [AICPA Adapted]...
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- What is the correct answer in choices A-D?Kindly provide a solution and explanation.arrow_forwardRequired information Skip to question [The following information applies to the questions displayed below.] Ramer and Knox began a partnership by investing $58,000 and $87,000, respectively. During its first year, the partnership earned $180,000. Prepare calculations showing how the $180,000 income is allocated under each separate plan for sharing income and loss. 2. The partners agreed to share income and loss in proportion to their initial investments. Net income is $180,000. Note: Do not round intermediate calculations.arrow_forwardCan you work this problemarrow_forward
- Please answer in proper format with all working clearly S.Pagan and T. Tabor share income on a 7:3 basis. They have capital balances of $120,000 and $51,000, respectively, when W. Wolford is admitted to the partnership. Prepare the journal entry to record the admission of W. Wolford under each of the following assumptions. (a) Investment of $88,000 cash for a 30% ownership interest with bonuses to the existing partners. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation (b). Debit Account Titles and Explanation Investment of $46,000 cash for a 30% ownership interest with a bonus to the new partner. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Credit Debit Creditarrow_forwardSubject - account Please help me. Thankyou.arrow_forwardNote:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.arrow_forward
- Admitting New Partner Who Contributes Assets After the tangible assets have been adjusted to current market prices, the capital accounts of Grayson Jackson and Harry Barge have balances of $93, 000 and $ 130,000, respectively. Lewan Gorman is to be admitted to the partnership, contributing $62,000 cash to the partnership, for which he is to receive an ownership equity of $81,000. All partners share equally in income. Question Content Area a. Journalize the entry to record the admission of Gorman, who is to receive a bonus of $19,000. If an amount box does not require an entry, leave it blank. blank Cash 62,000 Lewan Gorman, Drawing 81,000 Harry Barge, Capital 19,000 Lewan Gorman, Capital 81,000 Question Content Area b. What are the capital balances of each partner after the admission of the new partner? Partner Balance Grayson Jackson Sfill in the blank a4bbb009305cfea_1 155,000 Harry Barge Sfill in the blank a4bbb009305 cfea_2 11,000 Lewan Gorman Sfill in the blank a4bbb009305cfea_3…arrow_forwardanswer letter a, b, and c. please include a solution/explanation. thank you!arrow_forward= Admitting New Partner Who Contributes Assets After the tangible assets have been adjusted to current market prices, the capital accounts of Elayne Summers and Murv Newcomb have balances of $99,000 and $149,000, respectively. Rose Clayton is to be admitted to the partnership, contributing $66,000 cash to the partnership, for which she is to-receive an ownership equity of $86,000. All partners share equally in income. a. Journalize the entry to record the admission of Rose Clayton, who is to receive a bonus of $20,000. If an amount box does not require an entry, leave it blank. b. What are the capital balances of each partner after the admission of the new partner? Partner ▼ Elayne Summers Murv Newcomb Rose Clayton $ Balance c. Why are tangible assets adjusted to current market prices prior to admitting a new partner? Tangible assets should be adjusted to current market prices so that the new partner being admitted. For example, if the market price of land doubled prior to admitting…arrow_forward
- After the tangible assets have been adjusted to fair values, the capital accounts of Rey Refozar and Rogelio Ceradoy have balances of P75,000 and P125,000, respectively. Bexel Manongsong is to be admitted to the partnership, contributing P50,000 cash to the partnership, for which he is to receive an equity of P65,000. All partners share equally in profit. Required: 1. Prepare the journal entry to record the admission of Manongsong who is to receive a bonus of P15,000. 2. Calculate the capital balances of each partner after the admission of the new partner.arrow_forwardanswer letter d, e, and f. provide as well the solution/explanation. thank you!arrow_forwardAfter the tangible assets have been adjusted to current market prices, the capital accounts of Brad Paulson and Drew Webster have balances of $45,000 and $60,000, respectively. Austin Neel is to be admitted to the partnership, contributing $30,000 cash to the partnership, for which he is to receive an ownership equity of $35,000. All partners share equally in income.a. Journalize the entry to record the admission of Neel, who is to receive a bonus of $5,000.b. What are the capital balances of each partner after the admission of the new partner?c. Why are tangible assets adjusted to current market prices prior to admitting a new partner?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
