Liquidation of
in what ratio are losses during liquidation is assigned to partner’s capital account. Is this ratio used in all instances.
Want to see the full answer?
Check out a sample textbook solutionChapter 16 Solutions
Advanced Financial Accounting
- What is the first step in a partnership liquidation (termination and sale of assets)?arrow_forwardRecording a write-down from an original partner’s capital of book value to its implied fair market value would involve a debit to which account: a. Drawing b. Cash c. Capital d. Revenuearrow_forwardWhich one of the following will be recorded under debit side of the partners' capital account? a. Partner's salary b. Partners' share of profit c. Interest on capital d. Interest on drawingsarrow_forward
- During a liquidation, in what instance when cash may be distributed to any of the other partners?arrow_forwardWhich one of the following is a gain to the partners? a. Interest on loan from bank b. Withdrawal of capital c. Interest on drawings d. Interest on capitalarrow_forward. The share of loss of partners will appear: A. On the debit side of the profit and loss appropriation accountB. On the credit side of the profit and loss appropriation accountC. On the credit side of the partners’ capital accountD. Neither credit side nor debit side of the profit and loss appropriation accountarrow_forward
- In liquidation of LLP, for allocation of realization losses to partners, the journal entry includes: a. Debit each partner’s capital with his/her share in gains based final capital balances. b. Debit each partner’s capital with his/her share in gains based on income sharing ratios. c. Credit each partner’s capital with his/her share in gains based final capital balances. d. Credit each partner’s capital with his/her share in gains based on income sharing ratios.arrow_forwardChoose 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.arrow_forwardWhat are the three common limitations on the deductibility of a partner’s share of partnership losses, in the order in which they are applied?arrow_forward
- A statement of changes in partners' equity should Include all of the following except a. Beginning capital balances. b. Investments during the period. c. Partner's payments of loans. d. Withdrawals during the period. e. Ending capital balances. f. Share of profit for the period.arrow_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_forwardIn the liquidation of a limited liability partnership, a loan payable to a partner by the partnership is: a. Considered to be the same as the partner's capital account b. Paid before all outside creditors have been paid in full c. Considered to be zero. d. Used to absorb the partner's share of losses on realization of assetsarrow_forward
- Century 21 Accounting Multicolumn JournalAccountingISBN:9781337679503Author:GilbertsonPublisher:CengagePrinciples of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax College