ADVANCED FINANCIAL ACCOUNTING IA
12th Edition
ISBN: 9781260545081
Author: Christensen
Publisher: MCG
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Chapter 15, Problem 15.14Q
To determine
Revaluation method: under this method
the fair value of partnership in the partners agree to recognize
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Gorman and Morton form a partnership on May 1, 2022. Gorman contributes cash of $73,000; Morton conveys title to the following
properties to the partnership:
Equipment
Licensing agreements
Book Value
$ 26,500
46,500
Fair Value
$51,000
59,000
The partners agree to start their partnership with equal capital balances. No goodwill is to be recognized.
According to the articles of partnership written by the partners, profits and losses are allocated based on the following formula:
Gorman receives a compensation allowance of $1,300 per month.
All remaining profits and losses are split 40.60 between Gorman and Morton, respectively.
Each partner can make annual cash drawings of $5,000 beginning in 2023.
Net income of $22,500 is earned by the business during 2022.
Steele is invited to join the partnership on January 1, 2023. Because of her business reputation and financial expertise, she is given a
40 percent interest for $77,000 cash. The bonus approach is used to record this investment,…
In the AD partnership, Allen's capital is $140,000 and Daniel's is $40,000 and they share income in a 3:1 ratio, respectively. They decide to admit David to the partnership. Each of the following questions is independent of the others. Refer to the information provided above. Assume that David invests $50,000 for a one-fourth interest. Goodwill is to be recorded. The journal to record David's admission into the partnership will include: Multiple Choice A. a credit to David, Capital for $50,000. B. a credit to David, Capital for $60,000. C. a credit to cash for $50,000. D. a debit to goodwill for $7,500.
Xion and Boy are allies with $50,000,000 and $60,000,000 in capital balances, respectively. They
received Andre for a 1/3 ownership interest in the capital and profits of the partnership with an
investment of $65,000,000. If the goodwill procedure is used to record Andre's entry into the
partnership:
a). Boy's capital to $70,000,000
b).Goodwill will be recorded at a value of $15,000,000
c). Total capital to $175,000,000
d). Andre's capital becomes $58,333,333
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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