ADVANCED FINANCIAL ACCOUNTING IA
12th Edition
ISBN: 9781260545081
Author: Christensen
Publisher: MCG
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Chapter 15, Problem 15.1.3E
To determine
Concept Introduction:
Initial Investment in
When a partnership is formed, all partners can contribute for their capital. Contribution can be in cash or can be in form of fixed assets. When a partner contributes fixed assets as capital, then its capital contribution is fair value of assets contributed.
:
How the initial investment of property other than cash be recorded for financial accounting purposes.
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Two individuals who were previously sole proprietors formed a partnership. Property other than cash which is part of the initial investment in the partnership would be recorded for financial accounting purposes at the
-fair value of the property at the date of the investment.
-proprietors’ book values or the fair value of the property at the date of the investment, whichever is lower.
-proprietors’ book values or the fair value of the property at the date of the investment, whichever is higher.
-proprietors’ book values of the property at the date of the investment.
Equity securities acquired for trading shall be measured at
-cost plus directly attributable transaction cost
-fair value, with the change in fair value taken to other comprehensive income
-cost less directly attributable transaction cost
-fair value, with the change in fair value taken to profit or loss.
Identify which one of the following accounting entry for transfer of net profit at the end of the year:
a.
Dr: Profit and Loss account RO 35660
Cr: Profit and Loss Appropriation account RO 35660
b.
Dr: Profit and Loss Appropriation account RO 35660
Cr: Profit and Loss account Ro 35660
c.
Dr: Profit and Loss account RO 35660
Cr: Partners' Capital Account RO 35660
d.
Dr: Partner's Capital Account RO 35660
Cr: Profit and Loss account RO 35660
1. When a property other than Cash is invested in a partnership, at what amount should the noncash property credited to the contributing partner’s capital account?A. Original cost of the assets during acquisitionB. Assessed value of the property at the date of contributionC. Fair market value at the date of contributionD. Net book value at the date of contribution
2. Which of the following partners are not liable in case of partnership losses but is liable for partnership debts to the extent of their personal assets?A. Capitalist partnerB. Nominal partnerC. Industrial partnerD. Limited partner
3. Failure to stipulate on how profit and loss de divided among partners, it should be -A. in proportion to what has been contributedB. equally dividedC. settled in the court of lawD. by other legal means agreeable among partners
Kindly asnswer the questions correctly by choosing a letter. Thank you
Chapter 15 Solutions
ADVANCED FINANCIAL ACCOUNTING IA
Ch. 15 - Prob. 15.1QCh. 15 - Prob. 15.2QCh. 15 - Prob. 15.3QCh. 15 - Prob. 15.4QCh. 15 - Under what circumstances would a partner’s capital...Ch. 15 - Prob. 15.6QCh. 15 - Prob. 15.7QCh. 15 - Prob. 15.8QCh. 15 - Prob. 15.9QCh. 15 - Prob. 15.10Q
Ch. 15 - Prob. 15.11QCh. 15 - Prob. 15.12QCh. 15 - Prob. 15.13QCh. 15 - Prob. 15.14QCh. 15 - Prob. 15.15AQCh. 15 - Prob. 15.16BQCh. 15 - Prob. 15.1CCh. 15 - Prob. 15.2CCh. 15 - Prob. 15.3CCh. 15 - Prob. 15.1.1ECh. 15 - Prob. 15.1.2ECh. 15 - Prob. 15.1.3ECh. 15 - Prob. 15.1.4ECh. 15 - Multiple-Choice on Initial Investment [AICPA...Ch. 15 - Prob. 15.2ECh. 15 - Prob. 15.3ECh. 15 - Prob. 15.4ECh. 15 - Prob. 15.5ECh. 15 - Prob. 15.6ECh. 15 - Prob. 15.7ECh. 15 - Prob. 15.8.1ECh. 15 - Prob. 15.8.2ECh. 15 - Prob. 15.8.3ECh. 15 - Prob. 15.8.4ECh. 15 - Prob. 15.8.5ECh. 15 - Prob. 15.8.6ECh. 15 - Prob. 15.8.7ECh. 15 - Prob. 15.8.8ECh. 15 - Prob. 15.9ECh. 15 - Retirement of a Partner On January 1, 20X1, Eddy...Ch. 15 - Prob. 15.11PCh. 15 - Prob. 15.12PCh. 15 - Prob. 15.13PCh. 15 - Prob. 15.14PCh. 15 - Withdrawal of a Partner under Various Alternatives...Ch. 15 - Prob. 15.16.1PCh. 15 - Prob. 15.16.2PCh. 15 - Prob. 15.16.3PCh. 15 - Prob. 15.16.4PCh. 15 - Prob. 15.16.5PCh. 15 - Prob. 15.16.6PCh. 15 - Prob. 15.16.7PCh. 15 - Prob. 15.16.8PCh. 15 - Prob. 15.16.9PCh. 15 - Prob. 15.17PCh. 15 - Prob. 15.18PCh. 15 - Initial investments and Tax Bases [AICPA Adapted]...
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- Identify which one of the following accounting entry for transfer of net profit at the end of the year: Oa. Dr: Profit and Loss account RO 35660 Cr: Partners' Capital Account RO 35660 O b. Dr: Profit and Loss Appropriation account RO 35660 Cr: Profit and Loss account Ro 35660 Oc. Dr: Profit and Loss account RO 35660 Cr: Profit and Loss Appropriation account RO 35660 d. Dr: Partner's Capital Account RO 35660 Cr: Profit and Loss account RO 35660 The balance of capital for partner Mansoor at the end of the year will be: O a. RO 42270 O b. RO 42720 Ос RO 47220 O d. RO 40720 Identify which one of the following accounting entry for payment of salary to partner Mazin at the end of the year: Oa. Dr: Mazin's salary account RO 1000 Cr: Mazin's capital account RO 1000 O b. Dr. Mazin's Salary account RO 12000 Cr: Mazin's capital account RO 12000arrow_forwardEach partner's initial noncash investment in the partnership should be recorded at the a. carrying amount of the assets at the date of their transfer into the partnership. fair value of the assets at the date of their transfer into the business. c. original cost of the assets at the time they were purchased by the contributing partner. d. fair value of the assets at the date the partnership begins operations.arrow_forwardProblem: Admission by Purchase of Interest or Investment of Assets Dolores Aguilar, Isolde Sustrina, and Beth Bigalbal are partners in Cavite Realty Company. Their capital balances as at July 31, 2019, are as follows: Aguilar, Capital - 450,000Sustrina, Capital- 150,000Bigalbal, Capital- 300,000 Each partner has agreed to admit Nelia Pascual to the partnership. Required: Prepare the entries to record Pascual’s admission to or Aguilar’s withdrawal from the partnership under each of the following conditions: Pascual paid Aguilar P125,000 for 20% of Aguilar’s interest in the partnership. Pascual invested P200,000 cash in the partnership and received an interest equal to her investment. Pascual invested P300,000 cash in the partnership for a 20% interest in the business. A bonus is to be recorded for the original partners on the basis of their capital balances. Pascual invested P300,000 cash in the partnership for a 40% interest in the business. The original partners gave Pascual a…arrow_forward
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