ADVANCED FINANCIAL ACCOUNTING IA
ADVANCED FINANCIAL ACCOUNTING IA
12th Edition
ISBN: 9781260545081
Author: Christensen
Publisher: MCG
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Chapter 15, Problem 15.8.5E
To determine

Admission of partner: Changes in the membership of partnership occurs with the addition of new partners or disassociation of present partners. New partners often bring additional capital or needed expertise. A new partner can only be admitted with unanimous approval of all the existing partners, further public announcements are made about admission of partner. Section 306 of Uniform partnership act UPA 1997 states that a new partners are not liable for any liability incurred before new partners admitted. Thus, a new partner can be charged for partnership liabilities of existing partnership to the extent of capital contribution at the time of admission.

To choose:the correct answer to determine implied goodwill.

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Several years ago, a parent company acquired all of the outstanding common stock of its subsidiary for a purchase price of $320,000. On the acquisition date, this purchase price was $75,000 more than the subsidiary's book value of Stockholders' Equity. The AAP was entirely attributable to Goodwill. On the date of acquisition, the parent company's management believed that the goodwill had a 10-year useful life. Since the date of acquisition, the subsidiary has reported a cumulative net income of $260,000 and paid $105,000 in dividends to its parent company. Compute the balance of the Equity Investment account on the parent's balance sheet, assuming that the Goodwill asset has not declined in value since the date of acquisition.
what is sunset's total asset turnover ratio?
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