Principles of Financial Accounting.
24th Edition
ISBN: 9781260158601
Author: Wild
Publisher: MCG
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Chapter 12, Problem 6DQ
To determine
Whether Person B is correct.
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1. Why do you think an industrial partner does not share in the losses of partnership?
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Chapter 12 Solutions
Principles of Financial Accounting.
Ch. 12 - Prob. 1MCQCh. 12 - Prob. 2MCQCh. 12 - Prob. 3MCQCh. 12 - Prob. 4MCQCh. 12 - Prob. 5MCQCh. 12 - Prob. 1DQCh. 12 - Prob. 2DQCh. 12 - Prob. 3DQCh. 12 - Prob. 4DQCh. 12 - Prob. 5DQ
Ch. 12 - Prob. 6DQCh. 12 - Prob. 7DQCh. 12 - Prob. 8DQCh. 12 - Prob. 9DQCh. 12 - Prob. 10DQCh. 12 - Prob. 11DQCh. 12 - Prob. 12DQCh. 12 - Prob. 1QSCh. 12 - Prob. 2QSCh. 12 - Prob. 3QSCh. 12 - Prob. 4QSCh. 12 - Prob. 5QSCh. 12 - Prob. 6QSCh. 12 - Prob. 7QSCh. 12 - Prob. 8QSCh. 12 - The Field, Brown Snow partnership was begun with...Ch. 12 - Prob. 10QSCh. 12 - Determine whether each characteristic describes a...Ch. 12 - For each separate case, indicate which type of...Ch. 12 - Prob. 3ECh. 12 - Prob. 4ECh. 12 - Prob. 5ECh. 12 - Prob. 6ECh. 12 - Prob. 7ECh. 12 - Prob. 8ECh. 12 - Prob. 9ECh. 12 - Prob. 10ECh. 12 - Prob. 11ECh. 12 - Prob. 12ECh. 12 - Prob. 13ECh. 12 - Prob. 14ECh. 12 - Prob. 15ECh. 12 - Prob. 1APCh. 12 - Prob. 2APCh. 12 - Prob. 3APCh. 12 - Prob. 4APCh. 12 - Prob. 5APCh. 12 - Prob. 6APCh. 12 - Prob. 1BPCh. 12 - Prob. 2BPCh. 12 - Prob. 3BPCh. 12 - Prob. 4BPCh. 12 - Prob. 5BPCh. 12 - Prob. 6BPCh. 12 - Prob. 12SPCh. 12 - Prob. 1AACh. 12 - Prob. 2AACh. 12 - Review Samsungs 1938 to 1970 history at...Ch. 12 - Prob. 1BTNCh. 12 - Prob. 2BTNCh. 12 - Prob. 3BTNCh. 12 - Prob. 5BTN
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- 1. A and B are capitalist partners while C is an industrial partner. There is no agreement as to the profits and losses. The partnership realized profit in the amount of P150,000. a. The share of C in the profits shall be? b. Suppose instead of profit, the partnership suffered loss in the same amount of P150,000. The share of the capitalist partners in the loss shall be? c. Suppose instead of profit, the partnership suffered loss in the same amount of P150,000. The share of the industrial partner in the loss shall be? 2. A is the managing partner of AB Partnership. X is personally indebted to A for P25,000 and the partnership P75,000. When both debts mature, X pays A P10,000 and the latter issued a receipt for his personal credit. How shall the payment for P10,000 be applied? Please help me with these questions, I don't get it. Thank youarrow_forwardIn the liquidating process, any uncollectible deficiency becomes a loss to the partnership and is divided among the remaining partners' capital balances based on their income-sharing ratio. True Falsearrow_forward1. In a partnership liquidation the realization losses result in a debit balance in one partners’ capital account. If this partner fails to contribute personal assets to make up this deficit, how should the debit balance be handled by the partners? a. It should be written off against partnership profits like any other bad debt. b. It should be allocated to all the partners in their profit and loss ratio. c. It should be allocated to the remaining partners in their remaining P and L ratio. d. It should be set up as a receivable and turned over to a collection agency. 2. During liquidation, a partners’ capital account balance drops below zero. What should happen? a. The other partners should file a legal suit against the partner with the deficit balance. b. The partner with the highest capital balance should contribute sufficient assets to eliminate the deficit. c. The deficit balance…arrow_forward
- Which of the following statements is FALSE? A. A basis adjustment under 734(b) attributable to a partnership distribution is designed to protect the partners who did not receive the distribution from recognizing built-in gains that belong to the distributee partner. B. In order to determine the correct tax result for payments to a deceased or retired partner, one must first determine the retiring/deceased partner's share of the fair market value of partnership assets. Unrealized receivables are not considered an "asset" for this purpose if capital is not material income producing factor (such as a law firm). C. Payments to a retiring partner that compensate the partner for his share of the fair market value of partnership property are treated as guaranteed payments. D. All of the above statements are TRUEarrow_forward10. Before the allocation of loss, the following items are allocated first, except:A. Salaries to managing partner C. Interest on partnership’s bank loan B. Bonuses to partners D. Interest on partner’s capital 11. Statement 1. An industrial partner is not exempted from sharing in the loss of the partnership if he is also a capital partner.Statement 2. When a new partner is admitted in the existing partnership, there is no need the consent of all existing partners. Statement- 1 Statement- 2A. True FalseB. False FalseC. False TrueD. True True 12. Mark Javier is an active partner in the Javier & Dela Rosa partnership, receives an annual bonus of 25% the partnership profit after deducting a bonus. For the year ended, December 31, 2021, partnership income before the bonus amounted to 200,000. The amount of bonus given to Mark Javier for the year 2021 would be?Answer: P______________…arrow_forwardIf the income of a partnership is not sufficient enough to satisfy all of the provisions of the partnership’s profit-sharing agreement, how should this deficiency be handled?arrow_forward
- Emilio Alvarez and Graciela Zavala joined together to form a partnership. Is it possible for them to lose a greater amount than the amount of their investment in the partnership? Explain.arrow_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_forwardWhich 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 resourcesarrow_forward
- 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 sharingarrow_forwardWhich of the following is true regarding capital deficiencies? O a Ob Oc Od The partners do not have a legally enforceable claim against the partner with the capital deficiency. If a partner with a capital deficiency is unable to pay the amount owed to the partnership, the partners with debit balances must absorb the loss. The loss is allocated based on the profit and loss ratios between the partners whether with credit or debit balances. if the partner with the capital deficiency pays the amount owed to the partnership, the deficiency is eliminated.arrow_forwardThe partnership obtained a profit for the period. Salaries were distributed, and so are the interests on beginning capital balances. The next step to be done is to provide bonus to one of the partners. After calculating the bonus and had it given to the partner, the net income became insufficient. What should be done regarding this matter? a. Continue to provide the bonus and the insufficiency should be divided among the partners. b. The bonus should not be given anymore, and the remaining balance to be divided among the partners. c. The whole amount of profit should be divided among the partners equally. d. None of the given.arrow_forward
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