A new partner's agreed capital is the O amount credited to the new partner O bonus given to the new partner share of the new partner in the amount of asset revaluation recognized amount contributed by the new partner
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- A condition in admission of a new partner by investment where the total agreed capital (TAC) is equal with the total contributed capital (TCC) but the agreed capital of the new partner is less than his/her actual investment. Bonus to new partner Asset revaluation O Asset market value Bonus to old partnersA partnership records a partners' investment of assets in the business at the a. a value agreed by the partners b. fair market value of the assets invested c. the partners' book value of the assets invested d. any of the above e. all of the aboveAt the end of the year where will partner transfer drawings A/C under Fixed capital account method? Profit and loss Appropriation AC Profit and loss A/C Current A/C Capital A/C
- If total contributed capital is equal to total agreed capital with the new partner's investment is less than his capital credit, then the admission of the new partner involvesIn a partnership liquidation, a gain from the sale of assets is allocated to the: a. Payment of partnership liabilities b. Partner with the lowest capital balances first c. Partners based on their capital balances d. Partners based on their profit and loss ratio1. What entry is necessary to reflect interest payable on partner's drawings? a. Partner's Current (Dr.), Profit and Loss Appropriation (Cr.) b. Profit and Loss Appropriation (Dr.), Partner's Current (Cr.) c. Profit and Loss Appropriation (Dr.), Cash (Cr.) d. Profit and Loss Appropriation (Dr.), Partner's Capital (Cr.) 2. What entry is necessary to reflect interest earned on capital account balances? a. Partner's Drawings (Dr.), Partner's Current (Cr.) b. Profit and Loss Appropriation (Dr.), Partner's Drawings (Cr.) c. Partner's Drawings (Dr.), Interest Payable (Cr.) d. Partner's Current (Dr.), Profit and Loss Appropriation (Cr.) 3. A partner's personal gas receipts have been treated as part of the partnership's service vehicle expenses. Which of the following entries is necessary to correct the error? a. Drawings (Dr.), Service vehicle expense (Cr.) b. Service vehicle expense (Dr.), Drawings (Cr.) c. Service vehicle expense (Dr.), Capital…
- Each 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.Which of the following is added to the Partner's capital account in the Statement of Changes in Partner's Equity? Temporary withdrawal of investment by the Partner Share in the net income of the Partnership Share in the net loss of the Partnership Partners' drawing during the yearWhen a partner invests noncash assets in a partnership, the assets should be recorded at their: a) Book value. b) Market value c) Carrying value. d) Original cost.
- 32) The additional capital paid by a partner to the business of partnership will be: a. Debited to partners' capital account b. Credited to profit and loss account c. Debited to profit and loss appropriation account d. Credited to partners' capital accountTo compensate the partners for the difference in the capital contributions, this is incorporated in the profit or loss sharing salaries bonus interest interest and bonusHow does a newly formed partnership handle the contribution of previously depreciated assets? A. continues the depreciation life as if the owner had not changed B. starts over, using the contributed value as the new cost basis C. shortens the useful life of the asset per the partnership agreement D. does not depreciate the contributed asset