FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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If total contributed capital is equal to total agreed capital with the new partner's investment is less than his capital credit, then the admission of the new partner involves
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- Which statement is FALSE when describing the withdrawal of a partner? O It can be paid for from partners' personal assets. O It can be paid for from partnership assets. O Paying with partnership assets affects only the remaining partners' capital accounts. O Paying with partners personal assets affects only the remaining partners' capital accounts.arrow_forwardIn a case where parties agreed on the conversion of the loan into shares in a partnership and yet the new loan remained despite the conversion, is there novation?arrow_forwardAssume a partner withdraws from a partnership and receives assets of greater value than the book value of his equity. Should the remaining partners share the resulting reduction in their equities in the ratio of their relative capital balances or according to their income-and-loss-sharing ratio?arrow_forward
- In a partnership, distinguish between the goodwill and bonus methods.arrow_forward. How are “advances or drawings of money or property against a partner’s distributive share of income” treated?arrow_forwardIf A is the total capital of the partnership before the admission of a new partner, B is the total capital of the partnership after the investment of a new partner, C is the amount of the new partner’s investment, and D is the amount of capital credit to the new partner, then there isa) A bonus to the old partner if B = A + C and D=C.b) A bonus to the new partner if B = A + C and D=C.c) A bonus to the old partner if B = A + C and D>C.d) A bonus to the new partner if B = A + C and D>C.arrow_forward
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