Chapter 12, Problem 12SP

1)

To determine

Introduction:

Admission of Partners in a Partnership firm

• Partnership can be described as an association of two or more entities such as individuals; corporations etc. who undertake one or more activities with an intention to make a profit.

• The profit or loss of the association is distributed between the partners in a predetermined ratio known as a profit sharing ratio.

• Partnerships have certain features such as a contract for a partnership, existence of two or more persons, profit sharing ratio etc.

To Determine:

Factors to be considered while deciding which partnership agreement to offer

2)

To determine

Introduction:

Partnership

• Partnership can be described as an association of two or more entities such as individuals; corporations etc. who undertake one or more activities with an intention to make a profit.

• The profit or loss of the association is distributed between the partners in a predetermined ratio known as a profit sharing ratio.

• Partnerships have certain features such as a contract for a partnership, existence of two or more persons, profit sharing ratio etc.

Journal Entries

• Journal entries are the first step in recording financial transactions and preparation of financial statements.

• These represent the impact of the financial transaction and demonstrate the effect on the accounts impacted in the form of debits and credits.

• Assets and expenses have debit balances and Liabilities and Incomes have credit balances and according to the business transaction, the accounts are appropriately debited will be credited by credited to reflect the effect of business transactions and events.

To Prepare:

Journal entry to record purchase of partnership interest

3)

To determine

Introduction:

Partnership

• Partnership can be described as an association of two or more entities such as individuals; corporations etc. who undertake one or more activities with an intention to make a profit.

• The profit or loss of the association is distributed between the partners in a predetermined ratio known as a profit sharing ratio.

• Partnerships have certain features such as a contract for a partnership, existence of two or more persons, profit sharing ratio etc.

Journal Entries

• Journal entries are the first step in recording financial transactions and preparation of financial statements.

• These represent the impact of the financial transaction and demonstrate the effect on the accounts impacted in the form of debits and credits.

• Assets and expenses have debit balances and Liabilities and Incomes have credit balances and according to the business transaction, the accounts are appropriately debited will be credited by credited to reflect the effect of business transactions and events.

To Prepare:

Journal entry to record purchase of partnership interest if $20,090 is invested

4)

To determine

Introduction:

Partnership

• Partnership can be described as an association of two or more entities such as individuals; corporations etc. who undertake one or more activities with an intention to make a profit.

• The profit or loss of the association is distributed between the partners in a predetermined ratio known as a profit sharing ratio.

• Partnerships have certain features such as a contract for a partnership, existence of two or more persons, profit sharing ratio etc.

To Determine:

New Partner’s equity percentage if $20,090 is invested.