When Billie retired from Billie, Ive, and Fromis partnership, he received cash in excess of his capital account balance. Under the bonus method, the excess received by Billie a. had no effect on the capital account balances of Ive and Fromis. b. was recognized as bonus to the old partners c. reduced the capital account balances of both Ive and Fromis d. was recognized as an operating expense
When Billie retired from Billie, Ive, and Fromis partnership, he received cash in excess of his capital account balance. Under the bonus method, the excess received by Billie a. had no effect on the capital account balances of Ive and Fromis. b. was recognized as bonus to the old partners c. reduced the capital account balances of both Ive and Fromis d. was recognized as an operating expense
Chapter10: Partnership Taxation
Section: Chapter Questions
Problem 18MCQ
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Question
When Billie retired from Billie, Ive, and Fromis partnership , he received cash in excess of his capital account balance. Under the bonus method, the excess received by Billie
a. had no effect on the capital account balances of Ive and Fromis.
b. was recognized as bonus to the old partners
c. reduced the capital account balances of both Ive and Fromis
d. was recognized as an operating expense
Which of the following will not result in dissolution of a partnership?
a. Incapacity of a partner
b. admission of a new partner
c. bankruptcy of a partner
d.. negative capital balance of a partner
When a partner retires, the book of the partnership should be adjusted as of
a. the date of retirement
b. interim report
c. the balance sheet date
d. all of the above
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