Answered: Recording a write-down from an original…

Recording a write-down from an original partner’s capital of book value to its implied fair market value would involve a debit to which account: a. Drawing b. Cash c. Capital d. Revenue

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: Q. Which of the following is within the scope of investments accounted for using the equity method…

A: Equity Method of accounting: Any entity can invest in another entity by acquiring less…

Q: prepares separate financial statements

A: Correct Answer is :- A at cost

Q: Under IFRS, the amount of capital received in excess of par value would be credited to: a.…

Q: Demonstrate how to identify and account for equity investments accounted forunder the equity method

A: Equity method requires the investor to recognize investment income equal to its share percentage…

Q: Please answer with reason for all why the option is correct and why the other options are…

A: The correct option is C. Share application account.Explanation:When money is received at the time of…

Q: What are the pros and cons of investing into the following assets? Make comparison. a. A unit trust…

A: Unit trust investments invest in a range of individual securities. There will be a systematic risk…

Q: An investment in an associate is normally accounted for using the equity accounting method. This…

A: Whenever investor invests in shares and stock of other company, then ownership rights can be 20%,…

Q: Which of the options is an example of liability?

A: Liability is something a company or person owes, usually a sum of money. It denotes an obligation…

Q: how to arrive at earnings before paying the interest cost under the current capital structure

A: From Company data you go income statement of company

Q: How to Make Reporting for Capital Position According to PSAK?

A: Financial reporting:Financial reporting can be defined as the financial information of organization…

Q: Which of the following is the correct order of dividend payment process? A.Record Date- Ex-Dividend…

A: Dividends are processed in a chronological order by the company. It determines the timeline for a…

Q: Which of the following is not considered in the determination of Total Assets after business…

A: In business combination , following are considered for determination of total assets : 1. Fair…

Q: Matching type. Match these 4 investments into its corresponding definition below 1. Investment in…

A: The "investment in subsidiary" will be reported as an asset by the parent business, which will be…

Q: The underlying equity of an investment at acquisition: Question 6Answer a. Is recorded in the…

A: The accounting treatment of the underlying equity refers to the methods and principles applied in…

Q: Which of the alternatives results from the accrual of interest: a.Increase in liabilities and…

A: Expenses are accrued when these are incurred but are not paid. Due to the accrual concept, all the…

Q: The selection of the appropriate concept of capital by an entity should be based on the needs of the…

Q: 1. What is an intercorporate share investments? a) Significance Influence b) Financial Assets vs…

A: Investments are the resources that the entity or individual has when capital is allocated for a…

Q: Charges in the fair value of the effective portion of a hedging financial instrument are recognized…

A: Fair value hedge - It is related to a fixed value item and the fair value changes to hedging…

Q: a) Prepare the journal entry to record Sarasota's investment in Washi. Assume that any unexplained…

A: Introduction: - Journal entry is the first stage of accounting process. Journal entry used to record…

Q: Unrealized holding gain/loss which are taken to profit or loss are from securities that are…

A: Answer:- Unrealized gain meaning:- A notional profit that exists on paper as a consequence of an…

Q: Th e assumption that an entity will continue to operate for the foreseeable future is called: A .…

A: There are two important underlying assumptions of financial statements: 1. Accrual basis 2. Going…

Q: I. Contractual appropriation J. Share appreciation right K. Quasi-reorganization L Share dividends…

A: The question is related retun on capital. Capital dividend or liquidating dividends are return on…

Q: 4. Which of the following items will appear in the statement of changes in equity? a. Extraordinary…

A: Statement of changes in equity is part of financial statements is used to present the amount which…

Q: Investments in equity instruments are financial assets because they are Group of answer choices…

A: Solution: As per IAS, Financial assets are those assets that is: 1. Cash 2. an equity instrument of…

Q: investments in debt instruments are financial asset

A: First option is wrong because debt instruments are not equity instruments. Second option is wrong…

Q: Question: about IFRS 2. Evaluate whether the treatment of the two types of share-based payments as…

A: Answer:- IASB meaning:- The International Accounting Standards Board is known by its acronym, IASB.…

Q: Discuss the implication of reporting NCI as a separate item of owners equity

A: The minority interest or NCI is the position of ownership where the stake of a shareholder is not…

Q: Financial contracts are those which give simultaneous rise to the financial assets of one entity and…

A: Introduction: A financial contract is an arrangement in the form of an individually negotiated deal,…

Q: Discuss how Floating and Fixed debentures affects the profitability of a business?

A: In floating debentures the interest rate of such debentures change will the level of changes... Such…

Q: loses significant influence over the associate, the balance of the investment in the associate is…

A: When the company has significant influence over the associate, then equity method should be used for…

Q: nvestments in equity instruments are financial assets because they are Group of answer choices…

A: Financial instrument: International financial reporting standard- 9 (IFRS-9) states the rules and…

Q: Identify transaction belonging to Investing Activities O a. Interest received O b. Marketable…

A: The cash flow statement is prepared to record the cash flow from various activities during the…

Q: On October 1, Novak Ltd. purchased 9% bonds with a face value of $1,000 for trading purposes,…

A: FV_NI stands for "Fair Value through Net Income." Accounting for securities under FV_NI is a method…

Q: f the employee has the choice as to whether the settlement is in cash or by issuance of equity…

A: A Compound Financial Instrument is an instrument that has the characteristic of both an equity and…

Question

Recording a write-down from an original partner’s capital of book value to its implied fair market value would involve a debit to which account:

a. Drawing

b. Cash

c. Capital

d. Revenue

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1: Concept of write down of capital

VIEW

Step 2: Analysis and Answer

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

choose from the following accounts: Accumulated Other Comprehensive Income Allowance for Investment Impairment Bond Investment at Amortized Cost Cash Commission Expense Dividends Receivable Dividend Revenue FV-NI Investments FV-OC|Investments Gain on Disposal of Investments - FV-NI Gain on Disposal of Investments - FV-OCI Gain on Sale of Investments GST Receivable Interest Expense Interest Income Interest Payable Interest Receivable Investment in Associate Investment Income or Loss Loss on Discontinued Operations Loss on Disposal of Investments FV-NI Loss on Disposal of Investments FV-OCI Loss on Impairment Loss on Sale of Investments No Entry Note Investment at Amortized Cost Other Investments Recovery of Loss from Impairment Retained Earnings Unrealized Gain or Loss Unrealized Gain or Loss - OCI
The Equity Method of accounting for investments: a) Requires the investment asset to increase proportionally with the affiliates net income b) Requires the investment asset to decrease proportionally with the affiliates net loss c) Requires the investment asset to decrease proportionally with dividends received d) All of the above
Which of the following is the second option in measuring the equity instrument issued to extinguish a financial liability A.fair value of the equity instrument B.carrying amount of the equity instrument Cfair value of the financial liability D.carrying amount of the financial liability
IDENTIFICATION OF AN ASSETS, LIABILITY, EQUITY, INCOME, EXPENSES or WITHDRAWAL For each of the following instructions, indicate the following: ASSETS- if the transaction results to an asset LIABILITY- if the transaction results to a liability EQUITY- if the transaction results to an equity INCOME - if the transaction results to an income EXPENSE - if the transaction results to an expense WITHDRAWAL- if the transaction results to a withdrawal N/A- if the transaction does not result to any of the elements. Collection of interest income Exchange of land asset for a machinery asset. Newly born animal offspring Accrued and unpaid interest on borrowing of clients.
Which of the following results in an increase in the Equity in the Investee Income acct. when applying the equity method? Amortizations of purchase price over book value on date of purchase Amortization since date of purchase of purchase price over book value on date of purchase Sale of portion of the investment at a gain to the investor Investors share of gross profit from intra-entity inventory sale for the prior year Sale of a portion of the investment at a loss
Which of the following are Assets, Liabilities, EquityAccounts PayableCommon StockBonds PayableFurniture and FixturesInventoryInterest PayableDividentsAdditional paid-in-capitalPatents and copyrightsShort-term investments
25. A parent company’s investment account would include an element which is representative of : Multiple Choice the unrecorded difference between fair value and book value of the investee’s assets. the unrecorded book value of the investor’s assets. the goodwill accrued since the purchase of the investee. the recorded current value of the investee’s assets.
Debenture holders receive: i. fixed interestii. dividendiii. iii. profit A. i onlyB. ii onlyC. iii onlyD. neither i, ii nor iii
How are intra-entity transfers reported in an investee’s separate financial statements if the investor is using the equity method?
Equity accounting for intercorporate investment relies on book value. But if the ownership is an investment, how does fair value accounting enter in? Should it be considered at all?
54
Define each of the following terms:c. Off–balance sheet financing; capitalizing