ADVANCED FINANCIAL ACCOUNTING IA
12th Edition
ISBN: 9781260545081
Author: Christensen
Publisher: MCG
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Chapter 15, Problem 15.16.5P
To determine
Accounting for the formation of
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.
Revaluation method: under this method of valuation of capital:
- Increase the book values of existing net assets to their market values.
- Record unrecognized
goodwill . - Increase the existing partner’s capital accounts for their respective shares of the increase in the book values of the net assets and the recorded goodwill.
- The partnership’s total resulting capital reflects the existing capital balances plus the amount of revaluation plus the new partner’s investment.
To choose:the correct answer to determine initial capital by N.
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Problem 1. Alucard and Chou organized their partnership on 01/01/19. The following entries were made into their capital accounts during 2019.
Required: If partnership profits for the year equaled P66,000, indicate the allocations between the partners under the following independent profit-sharing allocation conditions:
Interest of 10% is allocated on weighted average capital balance and the remainder is divided equally.
A salary of P9,000 will be allocated to Chou; 10% interest on ending capital is allocated to the partners; remainder is divided 60/40 to Alucard and Chou, respectively.
Salaries are allocated to Alucard and Chou in the amount of P10,000 and P15,000, respectively and the remainder is allocated in the proportion to weighted average capital balances.
A bonus of 10% of partnership profits after bonus is credited to Alucard, a salary of P35,000 is allocated to Chou, a P20,000 salary is allocated to Alucard, 10% interest on weighted capital is allocated, and remainder is…
A partnership begins its first year with the following capital balances:
Alexander, Capital
Bertrand, Capital
Coloma, Capital
The articles of partnership stipulate that profits and losses be assigned in the following manner:
• Each partner is allocated interest equal to 6 percent of the beginning capital balance.
• Bertrand is allocated compensation of $18,000 per year.
• Any remaining profits and losses are allocated on a 3:3:4 basis, respectively.
• Each partner is allowed to withdraw up to $3,000 cash per year.
$ 62,000
72,000
82,000
Assuming that the net income is $72,000 and that each partner withdraws the maximum amount allowed, what is the balance in Coloma's capital account at the end of the year?
Multiple Choice
$103,336
$86,920
$100,336
Cor-Eng Partnership was formed on January 2, 20X1. Under the partnership agreement, each partner has a 50/50 capital balance with a true up a payment required to equal the initial capital accounts. Partnership net income or loss is allocated 50/50. To form the partnership, Cor originally contributed assets costing $30,000 with a fair value of $60,000 on January 2, 20X1, while Eng contributed $20,000 in cash. Drawings by the partners during 20X1 totaled $3,000 by Cor and $9,000 by Eng. Cor-Eng's 20X1 net income was $25,000. Eng's initial capital balance (after the true up payment) in Cor-Eng is
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]...
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