Which method of accounting for contributions of capital to a partnership (Bonus or Goodwill) do you...

Which method of accounting for contributions of capital to a partnership (Bonus or Goodwill) do you think is more representationally faithful and why?

Expert Solution

ekkarill92 answered 1 year ago

1. Compare and contrast the Bonus method and Goodwill method of in admitting a new partner...

1. Compare and contrast the Bonus method and Goodwill method of in admitting a new partner to a partnership 2. Describe the order in which assets must be distributed upon liquidation of a partnership

Farmer and Taylor formed a partnership with capital contributions of $205,000 and $255,000, respectively. Their partnership...

Farmer and Taylor formed a partnership with capital contributions of $205,000 and $255,000, respectively. Their partnership agreement calls for Farmer to receive a $72,000 per year salary. The remaining income or loss is to be divided equally. Assuming net loss for the current year is $16,000, the journal entry to allocate the net loss is: Debit Taylor, Capital, $44,000; Credit Income Summary, $16,000; Credit Farmer, Capital, $28,000. Debit Income Summary, $16,000; Debit Farmer, Capital, $28,000; Credit Taylor, Capital, $44,000. Debit...

Answer the following true or false for each: 22. Under the goodwill method, if the partnership...

Answer the following true or false for each: 22. Under the goodwill method, if the partnership acquires a partner’s interest at more than book value, goodwill can be recorded at either the amount traceable to the withdrawing partner’s capital or the amount traceable to the entire entity. 23. In a general partnership, all partners have the ability to enter into binding contracts (on the partnership) related to the partnership business purpose. 24. If a partner’s capital account becomes negative (a...

Accounting - Propose a bonus system that you believe is optimal for IE. Why do you...

Accounting - Propose a bonus system that you believe is optimal for IE. Why do you think your proposed system is optimal? Explain

Sharon and Nancy formed a partnership by making capital contributions of $130,000 and $195,000 respectively. The...

Sharon and Nancy formed a partnership by making capital contributions of $130,000 and $195,000 respectively. The annual partnership income of $230,000 is to be allocated assuming a salary allowance of $40,000 to Sharon and $35,000 to Nancy; interest allowances of 12% on their initial capital investments; and the balance shared equally. Prepare the entries to record the initial capital investments, the allocation of net income, and close the partner's withdrawal accounts assuming that Sharon withdrew $50,000 and Nancy withdrew $45,000.

1. Farmer and Taylor formed a partnership with capital contributions of $280,000 and $330,000, respectively. Their...

1. Farmer and Taylor formed a partnership with capital contributions of $280,000 and $330,000, respectively. Their partnership agreement calls for Farmer to receive a $86,000 per year salary. The remaining income or loss is to be divided equally. Assuming net income for the current year is $231,000, the journal entry to allocate net income is: 2. Christie and Jergens formed a partnership with capital contributions of $210,000 and $310,000, respectively. Their partnership agreement calls for Christie to receive a $51,000...

7. Barbara Stone and James Lovejoy form a partnership with capital contributions of $700,000 and $800,000...

7. Barbara Stone and James Lovejoy form a partnership with capital contributions of $700,000 and $800,000 respectively. Their partnership agreement calls for Barbara Stone to receive $150,000 in salary and each partner is to receive a 15% interest allowance on the partner's beginning balance with the remaining income or loss divided equally. If the net loss for the initial year is $20,000 calculate Barbara Stone and James Lovejoy's respective share of the net loss and record the entry. 8. Dan...

What kind of asset is goodwill? How do you determine the amount of goodwill? How do...

What kind of asset is goodwill? How do you determine the amount of goodwill? How do you treat goodwill subsequent to its acquisition?

Hailee makes the following contributions in 2019 (all of which she can substantiate): Goodwill, clothing she...

Hailee makes the following contributions in 2019 (all of which she can substantiate): Goodwill, clothing she bought for $950 with a FMV of $310. Salvation Army, automobile, FMV of $750, sold for $700. YWCA, 200 volunteer miles. Nonprofit cemetery, $500 for care of her grandfather's crypt. Qualified exchange student, $1,000 during four months for the well-being of the student. How much will she be able to deduct for contributions on Schedule A? $1,238 $1,288 $1,738 $2,838

Mo Meek, Lu Ling, and Barb Beck formed the MLB Partnership by making capital contributions of...

Mo Meek, Lu Ling, and Barb Beck formed the MLB Partnership by making capital contributions of $67,500, $262,500, and $420,000, respectively. They predict annual partnership net income of $450,000 and are considering the following alternative plans of sharing income and loss: (a) equally; (b) in the ratio of their initial capital investments; or (c) salary allowances of $80,000 to Mo, $60,000 to Lu, and $90,000 to Barb; interest allowances of 10% on their initial capital investments; and the balance shared...

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