ADVANCED ACCOUNTING-EBOOK ACCESS
14th Edition
ISBN: 9781264157068
Author: Hoyle
Publisher: MCG
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Chapter 15, Problem 2P
To determine
Identify the statement which is true concerning the accounting for a
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Choose the correct.Which of the following statements is true concerning the accounting for a partnership going through liquidation?a. Gains and losses are reported directly as increases and decreases in the appropriate capital account.b. A separate income statement is created to measure only the profit or loss generated during liquidation.c. Because gains and losses rarely occur during liquidation, no special accounting treatment is warranted.d. Within a liquidation, all gains and losses are divided equally among the partners.
IDENTIFICATION:
Another term for liquidation by total.
A partner whose capital account balance is debit.
A financial statement that shows the result of the liquidation process.
It is transfer of capital from one partner to another.
The person assigned to monitor the liquidation process.
It is the termination of the life of the partnership.
Claims against partners personal assets by creditors if the partnership can't pay its debts refers to?
a liquidation differs from a dissolution in that in a liquidation?
Chapter 15 Solutions
ADVANCED ACCOUNTING-EBOOK ACCESS
Ch. 15 - Prob. 1QCh. 15 - Prob. 2QCh. 15 - Prob. 3QCh. 15 - Prob. 4QCh. 15 - What is the purpose of a statement of liquidation?...Ch. 15 - Prob. 1PCh. 15 - Prob. 2PCh. 15 - Prob. 3PCh. 15 - Prob. 4PCh. 15 - A partnership is considering possible liquidation...
Ch. 15 - What is a predistribution plan? a. A list of the...Ch. 15 - Prob. 7PCh. 15 - Prob. 8PCh. 15 - Prob. 9PCh. 15 - Prob. 10PCh. 15 - Prob. 11PCh. 15 - Prob. 12PCh. 15 - Prob. 13PCh. 15 - Prob. 14PCh. 15 - Prob. 15PCh. 15 - Prob. 16PCh. 15 - Prob. 17PCh. 15 - Prob. 18PCh. 15 - Prob. 25PCh. 15 - Prob. 26PCh. 15 - March, April, and May have been in partnership for...Ch. 15 - Prob. 28PCh. 15 - Prob. 29P
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- Statement I: When a Partnership's operations resulted to a net loss, a partner who contributed legal services, shall have share of loss in accordance to the losses agreement. However, if there is no losses agreement, he shall not be liable to any loss.Statement II: All withdrawals and investments shall be considered when computing for the weighted average capital balance. Group of answer choices S1 is true; S2 is false Both statements are true S1 is false; S2 is true Both statements are falsearrow_forwardPrior to proceeding with the liquidation, the partnership should ________. A. prepare adjusting entries without closing B. complete the accounting cycle for final operational period C. prepare only closing entries D. complete financial statements onlyarrow_forwardIn the liquidation of a partnership, it is necessary to (1) distribute cash to the partners, (2) sell noncash assets, (3) allocate any gain or loss on realization to the partners and (4) pay liabilities. These steps should be performed in the following order Select one: a. (2), (3), (1), (4). b. (2), (3), (4), (1). c. (3), (2), (1), (4). d. (3), (2), (4), (1).arrow_forward
- In a partnership liquidation, if a partner has a debit capital balance in his or her capital account, he or she is responsible for contributing personal assets sufficient to eliminate the deficit. Group of answer choices True Falsearrow_forwardIf the share of losses on realization of the sale of noncash assets exceed the balance in a partner's capital account, the resulting balance is called a deficiency. Group of answer choices True Falsearrow_forwardWhich of the following is not correct with respect to an installment liquidation of a partnership? A.) All remaining liquidation expenses are anticipated. B.) All non-cash assets are assumed to be worthless. C.) Distributions to partners are always made according to their profit sharing percentages. D.) Partners with the greatest ability to absorb losses and expenses are the first to receive installment distributions.arrow_forward
- In the liquidation of a partnership it is important to (1) distribute cash to the partners, (2) sell noncash assets, (3) allocate any gain or loss on realization to the partners, and (4) pay liabilities. These steps should be performed in the following order: (3), (2), (4), (1) (3), (2), (1), (4) (2), (3), (1), (4) (2), (3), (4), (1)arrow_forward1. During liquidation, a partners’ capital account balance drops below zero. What should happen? a. The partner with a deficit should contribute enough assets to offset the deficit balance. b. The other partners should file a legal suit against the partner with the deficit balance. c. The partner with the highest capital balance should contribute sufficient assets to eliminate the deficit. d. The deficit balance should be removed from the accounting records with only the remaining partners sharing in future gains and losses. 2. If the total debits in the statement of realization and liquidation exceeds the total credits, there is a.none of these b. net loss for the period c. either net gain for the period d.net gain for the period 3. In the liquidation of a partnership, a loan payable to a partner: a. Must be closed to that partners’ drawing account. b.Has the same priority as amounts payable to outside creditors of the partnership. c.Will not advance the time of payment to that…arrow_forwardState the method to determine the amounts to be paid to partners in a liquidation.arrow_forward
- Why are liquidation gains and losses usually recorded as direct adjustments to the partners’ capital accounts?arrow_forwardWhich of the following methods are used to calculate the estimated profit up to the date of death of a partner? O a. Turnover method O b. Both time basis and turnover method O c. Time basis method o d. None of these are correctarrow_forwardWrite a Sample Format of Statement of Liquidation (Lump Sump) Other Instruction (Assumptions) 1. Values should be written as XXX if positive and (XXX) if negative 2. 7 Partners [Jk, V, RM, Jimin, Hobi, Jin and Suga] 3. There is a gain in the realization of assets 4. There is liquidation expense. 5. V has receivables from partnership. 6. Jin and Suga have payables to the partnershiparrow_forward
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