Accounting for the formation of partnership : At the formation of partnership, all the partners contributes agreed value of cash and noncash assets, it is necessary to assign a proper value to the noncash assets and liabilities contributed by partners. The partnership must clearly distinguish between capital contributions and loans made to the partnership by individual partners. The individual partners must agree to the percentage of equity that each will have in the partnership’s net assets. Generally, the capital balance is determined by proportionate share of each partner’s capital contribution. 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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Answer 1

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Definition Definition Arrangement between two or more people whereby they agree to manage business operations and share its profits and losses in an agreed ratio. The agreement drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, and drawings of a partner.

Chapter 15, Problem 15.16.4P

To determine

Accounting for the formation of partnership:At the formation of partnership, all the partners contributes agreed value of cash and noncash assets, it is necessary to assign a proper value to the noncash assets and liabilities contributed by partners. The partnership must clearly distinguish between capital contributions and loans made to the partnership by individual partners.

The individual partners must agree to the percentage of equity that each will have in the partnership’s net assets. Generally, the capital balance is determined by proportionate share of each partner’s capital contribution.

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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Pugh Sporting Goods manufactures two types of kayaks: River Explorers and Lake Cruisers. The company incurred manufacturing overhead costs of $320,000 in May. They have decided to allocate these costs based on units produced. During May, the company used 10,500 direct labor hours for River Explorers and 12,000 direct labor hours for Lake Cruisers. In total, the company produced 8,000 River Explorers and 6,000 Lake Cruisers. The amount of overhead allocated to each product, respectively, would be: a) $182,880 and $137,160 b) $140,000 and $180,000 c) $160,000 and $160,000 d) $175,000 and $145,000 e) $168,000 and $152,000

I need guidance with this financial accounting problem using the right financial principles.

Please help me solve this general accounting problem with the correct financial process.

Answer 2

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Definition Definition Arrangement between two or more people whereby they agree to manage business operations and share its profits and losses in an agreed ratio. The agreement drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, and drawings of a partner.

Chapter 15, Problem 15.16.4P

To determine

Accounting for the formation of partnership:At the formation of partnership, all the partners contributes agreed value of cash and noncash assets, it is necessary to assign a proper value to the noncash assets and liabilities contributed by partners. The partnership must clearly distinguish between capital contributions and loans made to the partnership by individual partners.

The individual partners must agree to the percentage of equity that each will have in the partnership’s net assets. Generally, the capital balance is determined by proportionate share of each partner’s capital contribution.

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

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 3

Question

Definition Definition Arrangement between two or more people whereby they agree to manage business operations and share its profits and losses in an agreed ratio. The agreement drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, and drawings of a partner.

Chapter 15, Problem 15.16.4P

To determine

Accounting for the formation of partnership:At the formation of partnership, all the partners contributes agreed value of cash and noncash assets, it is necessary to assign a proper value to the noncash assets and liabilities contributed by partners. The partnership must clearly distinguish between capital contributions and loans made to the partnership by individual partners.

The individual partners must agree to the percentage of equity that each will have in the partnership’s net assets. Generally, the capital balance is determined by proportionate share of each partner’s capital contribution.

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

See solution

Answer 4

Question

Definition Definition Arrangement between two or more people whereby they agree to manage business operations and share its profits and losses in an agreed ratio. The agreement drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, and drawings of a partner.

Chapter 15, Problem 15.16.4P

To determine