Principles of Accounting Volume 1
19th Edition
ISBN: 9781947172685
Author: OpenStax
Publisher: OpenStax College
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Textbook Question
Chapter 15, Problem 15MC
When a
A. allocate the gain or loss on sale based on income sharing ratio
B. pay off liabilities
C. sell noncash assets
D. divide the remaining cash among the partners
Expert Solution & Answer
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Students have asked these similar questions
The first step in the liquidation of a
partnership is to*
allocate a gain or loss on realization to the
partners.
O distribute remaining cash to the partners.
O pay partnership liabilities.
sell noncash assets and recognize a gain or
loss on realization.
One of the final steps in terminating a partnership is the distribution of remaining assets to the partners after all obligations have been met. What is the basis for distributing any remaining assets/cash among the partners? How would loans from partners affect the distribution of partnership assets?
In the liquidation of a partnership, it is necessary to
(1) distribute cash to the partners, (2) sell noncash assets,
(3) allocate any gain or loss on realization to the partners
and (4) pay liabilities. These steps should be performed in the following order
Select one:
a. (2), (3), (1), (4).
b. (2), (3), (4), (1).
c. (3), (2), (1), (4).
d. (3), (2), (4), (1).
Chapter 15 Solutions
Principles of Accounting Volume 1
Ch. 15 - A partnership ________. A. has one owner B. can...Ch. 15 - Any assets invested by a particular partner in a...Ch. 15 - Which of the following is a disadvantage of the...Ch. 15 - Mutual agency is defined as: A. a mutual agreement...Ch. 15 - Chani contributes equipment to a partnership that...Ch. 15 - Juan contributes marketable securities to a...Ch. 15 - Which one of the following would not be considered...Ch. 15 - A well written partnership agreement should...Ch. 15 - What type of assets may a partner not contribute...Ch. 15 - How does a newly formed partnership handle the...
Ch. 15 - Thandie and Marco are partners with capital...Ch. 15 - Thandie and Marco are partners with capital...Ch. 15 - Thandie and Marco are partners with capital...Ch. 15 - Thandie and Marco are partners with capital...Ch. 15 - When a partnership dissolves, the first step in...Ch. 15 - When a partnership dissolves, the last step in the...Ch. 15 - Prior to proceeding with the liquidation, the...Ch. 15 - Does a partnership pay income tax?Ch. 15 - Can a partners personal assets in a limited...Ch. 15 - Can a partnership assume liabilities as part of...Ch. 15 - Does each partner have to contribute an equal...Ch. 15 - What types of bases for dividing partnership net...Ch. 15 - Angela and Agatha are partners in Double A...Ch. 15 - On February 3, 2016 Sam Singh invested $90,000...Ch. 15 - Why do partnerships dissolve?Ch. 15 - What are the four steps involved in liquidating a...Ch. 15 - When a partner withdraws from the firm, which...Ch. 15 - What is the first step in a partnership...Ch. 15 - When a partnership liquidates, do partners get...Ch. 15 - Coffee Partners decides to close due to the...Ch. 15 - On May 1, 2017, BJ and Paige formed a partnership....Ch. 15 - The partnership of Chase and Chloe shares profits...Ch. 15 - The partnership of Tasha and Bill shares profits...Ch. 15 - Cheese Partners has decided to close the store. At...Ch. 15 - The partnership of Michelle, Amal, and Maureen has...Ch. 15 - The partnership of Tatum and Brook shares profits...Ch. 15 - Arun and Margot want to admit Tammy as a third...Ch. 15 - When a partnership is liquidated, any gains or...Ch. 15 - The partnership of Magda and Sue shares profits...Ch. 15 - The partnership of Arun, Margot, and Tammy has...Ch. 15 - Match each of the following descriptions with the...Ch. 15 - While sole proprietorships and corporations are...Ch. 15 - A partnership is thriving. The three partners get...
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- When a partnership dissolves, the last step in the dissolution process is to ________. A. allocate the gain or loss on sale based on income sharing ratio B. pay off liabilities C. sell noncash assets D. divide the remaining cash among the partnersarrow_forwardWhen a partnership is liquidated, any gains or losses realized by the sale of noncash assets are allocated to the partners based on their income sharing ratio. Why?arrow_forwardAny assets invested by a particular partner in a partnership ________. A. do not become a partnership asset but instead remain with the partner B. can be used only by the investing partner C. become the property of all the partners D. are the basis for all profit sharingarrow_forward
- When a partnership liquidates, do partners get paid first or do creditors get paid first?arrow_forwardWhat is the first step in a partnership liquidation (termination and sale of assets)?arrow_forwardHow does a newly formed partnership handle the contribution of previously depreciated assets? A. continues the depreciation life as if the owner had not changed B. starts over, using the contributed value as the new cost basis C. shortens the useful life of the asset per the partnership agreement D. does not depreciate the contributed assetarrow_forward
- If a partnership is liquidated, how is the final allocation of business assets made to the partners? Multiple Choice According to the initial investment made by each of the partners. According to the profit and loss ratio. Equally. According to the final capital account balances.arrow_forwardIn partnership liquidation, the final cash distribution to the partners should be made in accordance with the: a. Partners’ profit and loss sharing ratio b. Balances of the partner’s capital account c. Ratio of the capital contributions by the partners d. Ratio of capital contributions less withdrawals by the partnersarrow_forwardIn the liquidation of a partnership it is important to (1) distribute cash to the partners, (2) sell noncash assets, (3) allocate any gain or loss on realization to the partners, and (4) pay liabilities. These steps should be performed in the following order: (3), (2), (4), (1) (3), (2), (1), (4) (2), (3), (1), (4) (2), (3), (4), (1)arrow_forward
- Is a true or false question: 1) During a partnership liquidation, if a partner has a debit capital balance in his or her capital account, he or she is responsible for contributing personal assets sufficient to eliminate the deficit. 2) The distribution of cash, as the final step in the process in winding up the affairs of a partnership, is distributed based on the income-sharing ratio.arrow_forwardIn accounting for the lump-sum liquidation of a partnership, cash payments to partners after all non-partner creditors’ claims have been satisfied, but before the final cash distribution should be according to: a. Safe payment computations. b. The final balances in partner capital accounts. c. The partners’ relative profit and loss sharing ratio. d.The partners’ relative share of the gain or loss on liquidation.arrow_forwardIn accounting for the lump-sum liquidation of a partnership, cash payments to partners after all non-partner creditors' claims have been satisfied, but before the final cash distribution should be according toa. the final balances in partner capital accounts.b. the partners' relative share of the gain or loss on liquidation.c. the partners' relative profit and loss sharing ratio.d. safe payment computations.arrow_forward
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