16. When there are significant changes in stockholders equity, generally, a retained earnings statement is not...

16. When there are significant changes in stockholders equity, generally, a retained earnings statement is not sufficient, requiring a statement of stockholders’ equity to be prepared. a. True b. False

17. The equity reporting for a Limited Liability Corporation is similar to that of a partnership but the changes in capital ate shown on a statement of members’ equity. a. True b. False

18. When a partner invests noncash assets in a partnership, the assets are recorded at the partner’s book value. a. True b. False

19. Accounts receivable contributed to the partnership are recorded at their face value. a. True b. False

20. A new partner contributes accounts receivable to a partnership which appear in the ledger of his sole proprietorship at $20,500 and there was an allowance for doubtful accounts of 750. If $600 of the accounts receivables are completely worthless, the partnership accounts receivables should be debited for $19,900. a. True b. False

21. One reason that distributions of income and loss are prepared is to obtain the information to record a closing entry. a. True b. False

22. If nothing is stated, partnership income is divided in proportion to the individual partner’s capital balance. a. True b. False

23. The salary allocation to partners used in dividing net income would also appear as salary expense on the partnership income statement. a. True b. False

Expert Solution

16. False – when there is a significant change in stockholder’s equity, a retained earnings statement is prepared.

17. True – the equity reporting for a limited liability corporation is similar to a partnership but the changes in the capital are shown on a statement of members’ equity.

18. False – when a partner invest in a noncash assets in a partnership, the assets are recorded at the fair market value.

19. False – account receivables contributed to the partnership are recorded at their net realizable value.

20. True – the partnership account receivables should be debited for $ 19,900.

21. True – the distribution of income and loss are prepared is to obtain the information to record a closing entry.

22. True – if nothing is stated, the partnership income is divided in proportion to the individual partner’s capital.

23. False – the salary allocation to partners used in dividing net income won’t appear as salary expense on the partnership income statement.

ekkarill92 answered 2 years ago

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