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
Connect Access Card for Advanced Financial Accounting
- State the method to determine the amounts to be paid to partners in a liquidation.arrow_forwardQuestions: What are the rules in distributing profits and losses? Is it valid to exclude a partner in the distribution of losses? Why? Why not?arrow_forwardAccounting type Question: As per the decision in the Garner vs Murray case, when the partner's capital accounts are fixed, any loss arising due to the capital deficiency in the insolvent partner's capital account is to be borne by solvent partners in the ratio of ..... A. profit sharing ratio B. last agreed capital ratio C. sacrificing ratio D. gaining ratioarrow_forward
- 18) Which one of the following will not be recorded in profit and loss appropriation account? a. Commission to partner b. Interest on capital c. Salary to partner d. Interest paid to bankarrow_forward. How are “advances or drawings of money or property against a partner’s distributive share of income” treated?arrow_forwardGenerally speaking, what events or activities would normally result in a partner’s capital account being debited?arrow_forward
- Partners' capital balances reflect the cumulative effect of a. Initial Capital b. Additional capital c. Share in profit d. share in loss e. drawings f. all of the above g. a, b, c, and d onlyarrow_forwardWhich of the following can be used to offset a passive loss? a.Dividend income from stock held as an investment b.Active income such as wages c.Pension income d.Passive income such as income from a limited partnershiparrow_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_forward
- What is the fair-value option for reporting equity method investments? How do the equity method and fair-value accounting differ in recognizing income from an investee?arrow_forwardHow are safe capital balances computed when preliminary distributions of cash are to be made in a partnership liquidation?arrow_forwardWhen an entity prepares separate financial statements, it shall account for investments in associates A. At cost. B. Any of the choices. C. In accordance with PFRS 9. D. Using the equity method as described in PAS 28.arrow_forward
- Century 21 Accounting Multicolumn JournalAccountingISBN:9781337679503Author:GilbertsonPublisher:CengagePrinciples of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax College