Advanced Financial Accounting
12th Edition
ISBN: 9781259916977
Author: Christensen, Theodore E., COTTRELL, David M., Budd, Cassy
Publisher: Mcgraw-hill Education,
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Question
Chapter 15, Problem 15.13P
To determine
New partner investment: A new partner may acquire a share of the
Three cases of investment are possible.
- The new partner investment equals to the new partner’s proportion of the partnership’s book value.
- The investment is more than new partner’s proportion of the partnership’s book value. This indicates that the partnership’s prior net assets are undervalued on the books or the unrecorded
goodwill exists. - The investment is for less than the new partner’s proportion of the partnership’s book value. This suggests that partnership’s prior net assets are overvalued on its books or the new partner may be contributing goodwill in addition to the other assets.
the amount new partner S must contribute in cash or other assets in each of the given cases.
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Students have asked these similar questions
Assume the partnership income-sharing agreement calls for income to be divided with a salary of $41,000 to Coburn and
$36,000 to Webb, interest of 10% on beginning capital, and the remainder divided 50%-50%. Prepare the journal entry to record
the allocation of net income. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Account Titles and Explanation
Income Summary
Coburn, Capital
Webb, Capital
Debit
68000
Credit
33850
32150
Partners A, B, and C share income and losses in the ratio of 4:3:3, respectively. Assume the
following:
1. The noncash assets were sold for $75,000.
2. Liabilities were paid in full.
3. The remaining cash was distributed to the partners. (If any partner has a
capital deficiency, assume that the partner is unable to make up the capital deficiency.)
ABC PARTNERSHIP
Schedule of Cash Payments
Noncash
A
B
Item
Cash
Assets = Liabilities + Capital+ Capital Capital
Balances before
liquidation
25,000+
150,000 = 50,000 +25,000 + 35,000+ 65,000
9
How much cash will partner B receive from the liquidation?
10
How much cash will partner C receive from the liquidation?
The following condensed balance sheet is for the partnership of Ludolf, Sambal, and Urad, who share profits and losses in the ratio of
6.2.2, respectively.
Cash
Other assets
Total assets
Required A
$ 52,000
152,000
Required
$ 204,000
Required:
a. Assuming no liquidation expenses, calculate the safe payments that can be made to partners at this point in time.
b. For how much money must the other assets be sold so that each partner receives some amount of cash in a liquidation?
Complete this question by entering your answers in the tabs below.
Liabilities
Ludolf, capital
Sambal, capital
Urad, capital
Total liabilities and capital
Other assats must be sold
For how much money must the other assets be sold so that each partner receives some amount of cash in a liquidation?
$ 38,000
72,000
72,000
22,000
$ 204,000
< Required A
BY
Chapter 15 Solutions
Advanced Financial Accounting
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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