ADVANCED FINANCIAL ACCOUNTING IA
12th Edition
ISBN: 9781260545081
Author: Christensen
Publisher: MCG
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Chapter 15, Problem 15.1C
To determine
Partnership agreement:It is formal written agreement between partners. Partners are strongly advised to have a formal written agreement to avoid potential problems that could arise during the operation of the business. Each partner should sign the partnership agreement to indicate acceptance of its terms. A partnership agreement should include following items.
- Name of partnership and partners.
- Type of business to be conducted by the partnership.
- Initial capital contribution of each partner and method of future capital contributions.
- Manner of distribution of profit or loss, including salaries, interest on capital bonuses and limit of withdrawals.
- Procedure for changes in partnership such as admission on new partners.
- Other aspects such as
management and accounting methods to be used.
why a partnership agreement may need additional features in addition to income and loss sharing ratio.
To determine
Partnership agreement:It is formal written agreement between partners. Partners are strongly advised to have a formal written agreement to avoid potential problems that could arise during the operation of the business. Each partner should sign the partnership agreement to indicate acceptance of its terms. A partnership agreement should include following items.
- Name of partnership and partners.
- Type of business to be conducted by the partnership.
- Initial capital contribution of each partner and method of future capital contributions.
- Manner of distribution of profit or loss, including salaries, interest on capital bonuses and limit of withdrawals.
- Procedure for changes in partnership such as admission on new partners.
- Other aspects such as management and accounting methods to be used.
To discuss:The arguments against recording salary and bonus to partners’ as expenses included in computation of net income.
To determine
It is formal written agreement between partners. Partners are strongly advised to have a formal written agreement to avoid potential problems that could arise during the operation of the business. Each partner should sign the partnership agreement to indicate acceptance of its terms. A partnership agreement should include following items.
- Name of partnership and partners.
- Type of business to be conducted by the partnership.
- Initial capital contribution of each partner and method of future capital contributions.
- Manner of distribution of profit or loss, including salaries, interest on capital bonuses and limit of withdrawals.
- Procedure for changes in partnership such as admission on new partners.
- Other aspects such as management and accounting methods to be used.
To discuss: The arguments against recording salary and bonus to partners’ as partnership expenses.
To determine
It is formal written agreement between partners. Partners are strongly advised to have a formal written agreement to avoid potential problems that could arise during the operation of the business. Each partner should sign the partnership agreement to indicate acceptance of its terms. A partnership agreement should include following items.
- Name of partnership and partners.
- Type of business to be conducted by the partnership.
- Initial capital contribution of each partner and method of future capital contributions.
- Manner of distribution of profit or loss, including salaries, interest on capital bonuses and limit of withdrawals.
- Procedure for changes in partnership such as admission on new partners.
- Other aspects such as management and accounting methods to be used.
To discuss: the list of additional provisions that should be included in partnership agreement for the interest amount calculation.
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Students have asked these similar questions
QUESTION NO. 1:
Having the clear understanding of company’s accounts and partnership accounts you are required to answer the following questions.
What is partnership accounts give example and what are the necessary components of partnership accounts that a company should consider when preparing partnership accounts and why?
How can you differentiate the company’s accounts from partnership accounts and on what grounds?explain with the help of example.
(important instructions: content should be original with 0% plagirisim, answer should be in details with proper explanation and examples)
Briefly describe about partnership. What fundamentals of partnership agreement are necessary in the business? Also differentiate between charge and appropriation.
A.What is partnership accounts and what are the necessary components ofpartnership accounts that a company should consider when preparingpartnership accounts and why?B. How can you differentiate the company’s accounts from partnership accounts and on what grounds?
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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- Chris Gray, Bryson Alef, and Nick Pirollo are founding partners of their company, Scholly. Assume that Chris, Bryson, and Nick decide to expand their business with the help of general partners. Required 1. What details should Chris, Bryson, Nick, and their future partners specify in the general partnership agreements? 2. What advantages should Chris, Bryson, Nick, and their future partners be aware of with respect to organizing as a general partnership? 3. What disadvantages should Chris, Bryson, Nick, and their future partners be aware of with respect to organizing as a general partnership?arrow_forwardA partnership agreement should include each of the following except Basis for sharing net income or loss names and capital contributions of partners. Chart of accounts for the partnership. rights and duties of partners. A Moving to another question will save this response. ch DELLarrow_forwardIn general, a partnership is described as a legal relationship that exists between two or more people who carry on a joint business with the goal of benefit. (a) Describe the different types of partners and their characteristics. (attached point form answer for this question; kindly assist me to elaborate more on each points) (b) Determine the conditions that must be met for a partnership to exist.(attached point form answer for this question; kindly assist me to elaborate more on each points)arrow_forward
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- Direction: Write TRUE if the statement is true and FALSE if the statement is false. _1. A written partnership contract is required to be prepared whenever a partnership is formed. _2. All partnerships are subject to income tax. 3. A partner's contribution in the form of industry or service is recorded by debiting the account "Industry". _4. In the partnership books, there are as many capital and drawing accounts as there are partners. _5.A partners contribution in the form of noncash assets should be recorded at its fair market value in the absence of an agreed value. _6.A partnership is much easier and less expensive to organize than corporation. 7. A newly organized partnership should always open a new set of books . _8. All partnerships have at least one general partner. 9. Each partner generally has the authority to enter into contracts which are binding upon the partnership 10. The property invested in a partnership by a partner becomes the property of the partnership.…arrow_forwardThe objective of preparation of income statement of partnership is: a. To show how net profit has been distributed among partners b. To show the financial position of business c. To show the ratio of capital of partners d. To show the income and expenses of the partnership firmarrow_forwardPartnerships When two or more individuals come together to form a partnership, the assets that they bring with them into the partnership may be disproportionate. In this event, the assignment of capital may be based on the bonus method or the goodwill method. Please compare and contrast these methodologies in the formation of a partnership. Feel free to use examples.arrow_forward
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