Question

When a new partnership is formed and Goodwill is recognized what should follow: a. Nothing b....

When a new partnership is formed and Goodwill is recognized what should follow:

a.

Nothing
b.

Distribution of cash
c.

Increase all partners accounts
d.

Re-evaluation of assets and liabilities
Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Ans:a.   Nothing is Correct Answer

Explanation;

When a new partnership is formed and Goodwill is recognized , Then do nothing as the partnership consists of partners which are liable for their respective share of loss and liable to invest their respective share of partnership and agreements among which help them to carry the bussiness without any disputes in the later period and however goodwill is the value of the partnership which is increase when partnership performance and profits are well in version wth the public opinion on the market.

Hope this helped ! Let me know in case of any queries.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Callie is admitted to the Adams & Beal Partnership under the goodwill method. Callie contributes cash...
Callie is admitted to the Adams & Beal Partnership under the goodwill method. Callie contributes cash of $40,000 and non-cash assets with a market value of $60,000 and book value of $45,000 in exchange for a 20% ownership interest in the new partnership. Prior to the admission of Callie, the capital of the existing partnership was $250,000 and an appraisal showed the partnership net assets were fairly stated. Adams and Beal shared profits and losses at a ratio of 70/30,...
Adam and Alyssa are equal partners in the PartiPilo Partnership. The partners formed the partnership three...
Adam and Alyssa are equal partners in the PartiPilo Partnership. The partners formed the partnership three years ago by contributing cash. Prior to any distributions, the partners have the following bases in their partnership interests: (Leave no answer blank. Enter zero if applicable.) Partner Outside Basis Adam $ 14,300 Alyssa 14,300 On December 31 of the current year, the partnership makes a pro rata operating distribution of: Partner Distribution Adam Cash $ 22,600 Alyssa Cash $ 11,200 Property $ 11,400...
ustin and Lauren are equal partners in the PJenn Partnership. The partners formed the partnership seven...
ustin and Lauren are equal partners in the PJenn Partnership. The partners formed the partnership seven years ago by contributing cash. Prior to any distributions, the partners have the following bases in their partnership interests: (Leave no answer blank. Enter zero if appplicable.) Partner Outside Basis Justin $ 24,625 Lauren $ 24,625 On December 31 of the current year, the partnership makes a pro rata operating distribution of: Partner Distribution Justin Cash $ 28,375 Lauren Cash $ 20,250 Property $...
Please explain how you do this? RD formed a partnership on February 10, 20X9. R contributed...
Please explain how you do this? RD formed a partnership on February 10, 20X9. R contributed cash of $150,000, while D contributed inventory with a fair value of $120,000. Due to R's expertise in selling, D agreed that R should have 60 percent of the total capital of the partnership. R and D agreed to recognize goodwill. What is the total capital of the RD partnership and the capital balance of R after the goodwill is recognized? Total Capital R,...
When a new partner is admitted to an existing partnership, whether by contributing cash, property, or...
When a new partner is admitted to an existing partnership, whether by contributing cash, property, or expertise, an adjustment of the accounts of the partnership to current value should be made (if necessary). Any such adjustment should be made to the capital accounts of the existing partners (only) in their income/loss sharing ratio. the existing partners (only) in the ratio of their beginning-of-period capital accounts. the existing partners AND the new partner in their income/loss sharing ratio. the existing partners...
A, B, C, & D (all individuals) form a general partnership in which they each have...
A, B, C, & D (all individuals) form a general partnership in which they each have an equal interest in capital and profits. All the partners and the partnership are cash method taxpayers. In exchange for their respective partnership interest, each partner transfers the following assets, all of which have been held more than 2 years. PartnerAssetsAdjusted BasisFair Market Value ALand $30,000$70,000 Goodwill$0$30,000 BEquipment(S 1245 gain) $25,000$45,000 Installment note from The sale of land $20,000$25,000 Inventory$5,000$30,000 CBuilding$25,000$60,000 Land$25,000$10,000 Receivables for...
ABC Partnership was formed on March 1 of the current year by three individuals. A contributed...
ABC Partnership was formed on March 1 of the current year by three individuals. A contributed $20,000 cash for a 25% interest. B contributed property with an adjusted basis of $28,000 and fair market value of $32,000, subject to a $12,000 mortgage. C contributed property with an adjusted basis of $20,000 and fair market value of $64,000, subject to a $24,000 liability. B and C received 25% and 50% partnership interests, respectively. The partnership assumed both partners' liabilities. The partnership...
Following is the current balance sheet for a local partnership of doctors: Cash and current assets...
Following is the current balance sheet for a local partnership of doctors: Cash and current assets . . . . . . . . . . . . . . . . . . . . . $ 30,000 Land . . . . . . . . . . . . . . . . . . . . . . . 180,000 Building and equipment   (net) . . . . . . . . . . . ....
Following is the current balance sheet for a local partnership of doctors: Cash and current assets...
Following is the current balance sheet for a local partnership of doctors: Cash and current assets $ 64,000 Liabilities $ 66,000 Land 208,000 A, capital 46,000 Building and equipment (net) 168,000 B, capital 66,000 C, capital 116,000 D, capital 146,000 Totals $ 440,000 Totals $ 440,000 The following questions represent independent situations: E is going to invest enough money in this partnership to receive a 20 percent interest. No goodwill or bonus is to be recorded. How much should E...
The ABC partnership reports the following condensed balance sheet: Cash $ 480,000 Liabilities $2,000,000 Noncash assets...
The ABC partnership reports the following condensed balance sheet: Cash $ 480,000 Liabilities $2,000,000 Noncash assets 3,160,000 Partner A, capital 290,000 Partner B, capital 1,100,000 Partner C, capital 250,000 Total assets $3,640,000 Total liabilities and partner capital $3,640,000 The partners wish to liquidate the partnership. The noncash assets are sold for $2,300,000 with the loss distributed to the partners in the ratio of 30%/30%/40% to partner A, B, and C, respectively. The liabilities are paid in full. Assume that any...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT