F2-M9 - Partnerships Flashcards
Contributions by a partner to a partnership are recorded at _______ less the present value of liabilities assumed by the partnership.
Fair value
Contributions by a partner to a partnership are recorded at fair value less the _______________
present value of liabilities assumed by the partnership.
Admission of new partners may be accounted for using what methods (3)
the exact, bonus, or goodwill method
The ________ method adjusts the partners’ capital accounts for any difference
bonus method
The _______ method adjusts the assets (goodwill) and the existing partners’ capital accounts for the difference
goodwill
No adjustment is required to the partners’ capital accounts under the ______ method.
exact method
Income or loss is distributed among the partners in accordance with ____________,
their agreement,
In the absence of an agreement all partners share _________ irrespective of what their capital accounts reflect or the amount of time each partner spends on partnership affairs.
equally
Withdrawals of partners also use the ________ methods. (2)
bonus and goodwill
When a partnership is liquidated, ____ are sold, gains or losses are allocated to the partnership, _______ are paid, and the partners are entitled to receive the balance in their ______ account.
assets, liabilities, capital account
Partners who wind up with debit (overdrawn) balances owe that ____________ to the partnership and ___________
deficiency to the partnership and the other partners.
If the capital deficiency remains outstanding, the deficiency must be _______ by the remaining partners.
absorbed by the remaining partners.
For the Exact Method - What is the question you must ask?
How much should new parter contribute in order to have a ___ % interest
Bonus Method -Bonus goes to ______ if the new parter paid more than he got
Existing partners
Bonus Method -Bonus goes to ______ if the new parter paid less than what he got
New partners
