TRUE OR FALSE 14. Dissolution is the termination of parthership business.11. Partnership assets may be revalued but they may also remain at their carryingvalue.Is allocated to the existing partners based on their existing profit and lossratio.12. The bonus recognized by the existing partners when a new partner is admitted*o. If a new- partner directly acquires the interest of one the existing partner,consent of other existing partners are not needed.14. Dissolution is the termination of partnership business.*0. A partnership is not dissolved when a partner assigns his/her interest in thepartnership to a third party.16. Capital ratio is used to allocate the amount of asset revaluation.17. Bonus receive by the new partner are deducted to the capital interest of the oldpartners in proportion to their capital ratio.18. Bonus method is used when total agreed capital is greater than totalcontributed capital.19. A partnership may be dissolved without being liquidated.20. Incapacity of a partner is a ground for dissolution of partnership.

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11. Partnership assets may bè revalued but they may value. Is allocated to the existing partners based on their existing profit and loss ratio. 12. Thẻ bonus recognized by the existing partners when a new partner is admitted 15. If a new- partner directly acquires the interest of one the existing partner, consent of other existing partners are not needed.

11. Partnership assets may bè revalued but they may value. Is allocated to the existing partners based on their existing profit and loss ratio. 12. Thẻ bonus recognized by the existing partners when a new partner is admitted 15. If a new- partner directly acquires the interest of one the existing partner, consent of other existing partners are not needed.

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter21: Partnerships

Section: Chapter Questions

Problem 6BCRQ

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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 partners
How 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 asset
When 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?
Which of the following is a disadvantage of the partnership form of organization? A. limited life B. no taxation at the partnership level C. flexibility in business operations D. combining of financial resources
Any 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 sharing
The admission of a new partner to an existing partnership requires purchasing the interest of one or more existing partners. causes a legal dissolution of the existing partnership. may be accomplished only by investing assets in the partnership. is almost always accompanied by the liquidation of the business.
If a new partner acquires partnership interest directly from the partners rather than from the partnership, a. no entry is required. b. the existing partnership is liquidated. c. the partnership assets should not be revalued because this type of transaction does not result to partnership dissolution. d. the existing partners’ capital accounts are reduced and the new partner’s capital account is increased.
If an existing partner withdraws from a partnership which is true a. his or her interest may be sold to the partnership or an individual partner. b. the consideration received for that partner's interest may suggest the existence of undervalued existing assets and/or goodwill. c. either the bonus or the goodwill method may be used to record the transaction if the partnership acquires the withdrawing partner's interest. d. all of the above
s Claims against partners' personal assets by creditors if the partnership can't pay its debts refers to a. liquidation. b. dissolution. c. mutual agency. d. unlimited liability. 6 A liquidation differs from a dissolution in that in a liquidation a. assets may be revalued. b. the business will not continue. c. there may be an adjustment of partners' capital accounts. d. gains and losses are distributed according to the partnership agreement. 7. A partner's loss absorption balance is calculated by a. dividing the partner's capital balance by his percentage interest in capital. b. multiplying distributable assets by the partner's profit sharing percentage. C. dividing the partner's total interests by his profit and loss sharing percentage. d. multiplying the partner's total interests by his profit and loss sharing percentage. 8. In accounting for liquidation of a partnership, cash payments to partners after all outside creditors' claims have been satisfied, but before final cash…
In accounting for a withdrawal by payment from partnership assets, which statement is FALSE? O The withdrawing partner may be paid using non-cash assets. O Net assets will decrease O Total capital will decrease. O Asset revaluations should bx recorded.
If there is partnership deed, then which one of the following will apply? O a. Partners are not entitled to bonus O b. Interest on capital is not allowed O c. Interest will be charged on drawings d. Partners are not entitled to salary
When a new partner is admitted into the partnership by investment, the following take place except O Total assets and total partners' equity will decrease, unlike admission by purchase of interest. O Investment of non-cash assets must be recorded at current or fair market value. O. It is a transaction between the partnership and the incoming partner O. It involves the investment of assets by new partner into the partnership