Question: Ash and Bar are partners with capital

> What events would require partnership liquidation?

> Eli, Joe, and Ned agree to liquidate their consulting practice as soon as possible after the close of business on July 31, 2016. The trial balance on that date shows the following account balances: The partners share profits and losses 20 percent, 30 p

> The partnership of Gil, Hal, Ian, and Joe is preparing to liquidate. Profit- and loss-sharing ratios are shown in the summarized balance sheet at December 31, 2016, as follows: REQUIRED: 1. The partners anticipate an installment liquidation. Prepare a

> Fed, Flo, and Wil announced the liquidation of their partnership beginning on January 1, 2016. Profits and losses are divided 30 percent to Fed, 20 percent to Flo, and 50 percent to Wil. Balance sheet items are summarized as follows: REQUIRED: Prepare

> The December 31, 2016, balance sheet of the Cam, Doc, and Guy partnership, along with the partners’ residual profit- and loss-sharing ratios, is summarized as follows: The partners agree to liquidate their partnership as soon as possi

> Under the treasury stock approach, a mutually held subsidiary accounts for its investment in the parent on a cost basis. Are dividends received by the subsidiary from the parent included in investment income of the parent under the equity method?

> Ben, Bev, and Ron are partners in a business that is in the process of liquidation. On January 1, 2016, the ledger accounts show the balances indicated: The cash is distributed to partners on January 1, 2016. Inventory and supplies are sold for a lump-

> The after-closing trial balances of the Bea, Pat, and Tim partnership at December 31, 2016, included the following accounts and balances: Cash...................................................................... $120,000 Accounts receivable—net........

> The adjusted trial balance of the Jee, Moe, and Ole partnership at December 31, 2016, is as follows: Cash.................................................... $ 50,000 Accounts receivable—net.................... 100,000 Nonmonetary assets................

> Account balances for the Rob, Tom, and Val partnership on October 1, 2016, are as follows: The partners have decided to liquidate the business. Activities for October and November are as follows: October 1. Rob is short of funds, and the partners agre

> The balance sheet of Ron, Sue, and Tom, who share partnership profits 30 percent, 30 percent, and 40 percent, respectively, included the following balances on January 1, 2016, the date of dissolution: During January 2016, parts of the firmâ€

> Jax, Kya, and Bud, who share partnership profits 50 percent, 30 percent, and 20 percent, respectively, decide to liquidate their partnership. They need the cash from the partnership as soon as possible but do not want to sell the assets at fire-sale pric

> The after-closing trial balance of the Lin, Mae, and Nel partnership at December 31, 2016, was as follows: ADDITIONAL INFORMATION: 1. The partnership is to be liquidated as soon as the assets can be converted into cash. Cash realized on conversion of a

> Jon, Sam, and Tad are partners in a furniture store that began liquidation on January 1, 2016, when the ledger contained the following account balances: The following transactions and events occurred during the liquidation process: January

> The profit- and loss-sharing agreement of the partnership of Ali, Bob, and Kia provides a salary allowance for Ali and Kia of $10,000 each. Partners receive a 10 percent interest allowance on their average capital balances for the year. The remainder is

> Jan, Kim, and Lee announce plans to liquidate their partnership immediately. The assets, equities, and profit- and loss sharing ratios are summarized as follows. The other assets are sold for $120,000, and an overlooked bill for landscaping services of

> How is the treasury stock approach applied to the elimination of mutually held stock?

> Fed, Ela, and Luc have decided to liquidate their partnership. Account balances on January 1, 2016, are as follows: The partners agree to keep a $30,000 contingency fund and to distribute available cash immediately. REQUIRED: Determine the amount of c

> After closing entries were made on December 31, 2016, the ledger of Mac, Nan, and Obe contained the following balances: Due to unsuccessful operations, the partners decide to liquidate the business. During January some of the inventory is sold at cost

> The partnership of Flo and Fay is in the process of liquidation. On January 1, 2016, the ledger shows account balances as follows: On January 10, 2016, the lumber inventory is sold for $40,000, and during January, accounts receivable of $41,000 is coll

> 1. In partnership liquidation the final cash distribution to the partners should be made in accordance with the: a Partner profit- and loss-sharing ratios b Balances of partner capital accounts c Ratio of the capital contributions by partners d Safe paym

> The assets and equities of the Sam, Red, and Sal partnership at the end of its fiscal year on October 31, 2016, are as follows: The partners decide to liquidate the partnership. They estimate that the noncash assets, other than the loan to Red, can be

> The partnership of Dee, Ema, Lyn, and Geo is being liquidated over the first few months of 2016. The trial balance at January 1, 2016, is as follows: ADDITIONAL INFORMATION: 1. The partners agree to retain $20,000 cash on hand for contingencies and to

> The partnership of Ace, Ben, Cid, and Don is dissolved on January 5, 2016, and the account balances at June 30, 2016, after all noncash assets are converted into cash, are as follows: ADDITIONAL INFORMATION: 1. The percentages indicated represent the r

> After all partnership assets were converted into cash and all available cash distributed to creditors, the ledger of the Dan, Edd, and Fed partnership showed the following balances: The percentages indicated are residual profit- and loss-sharing ratios

> The partnership of Ali, Bev, and Cal became insolvent during 2016, and the partnership ledger shows the following balances after all partnership assets have been converted into cash and all available cash distributed: Profit- and loss-sharing percentag

> A condensed balance sheet with profit-sharing percentages for the Eve, Fae, and Gia partnership on January 1, 2016, shows the following: On January 2, 2016, the partners decide to liquidate the business, and during January they sell assets with a book

> If a parent owns 80 percent of the voting stock of a subsidiary, and the subsidiary in turn owns 20 percent of the stock of the parent, what kind of affiliation structure is involved? Explain.

> The affiliation structure for Place Corporation and its affiliates is as follows: During 2016 the separate incomes of the affiliates were as follows: Place.......................... $400,000 Lake............................ $160,000 Marsh.............

> Are partner salary allowances expenses of the partnership?

> Why do some profit-sharing agreements provide for salary and interest allowances?

> In the absence of an agreement for the division of profits, how are they divided under UPA? Does your answer also apply to losses? Does it apply if one partner invests three times as much as the other partners?

> What alternative approaches can be used in recording the admission of a new partner?

> If a partner sells his or her partnership interest directly to a third party, the partnership may or may not be dissolved. Under what conditions is the partnership dissolved?

> When a profit-sharing agreement specifies that profits should be divided using the ratio of capital balances, how should capital balances be computed?

> Explain how a partner could have a loss from partnership operations for a period even though the partnership had net income.

> Is there a conceptual difference between partner drawings and withdrawals? Is there a practical difference?

> Explain why the noncash investments of partners should be recorded at their fair values.

> Bob invests $10,000 cash for a 25 percent interest in the capital and earnings of the BOP Partnership. Explain how this investment could give rise to (a) recording goodwill, (b) the write-down of the partnership assets, (c) a bonus to old partners, and (

> Parent Company owns 70 percent of the voting stock of Subsidiary A, and Subsidiary A owns 70 percent of the stock of Subsidiary B. Is the inside ownership of Subsidiary B more than 50 percent? Should Subsidiary B be included in the consolidated statement

> The goodwill procedure was used to record the investment of a new partner in the XYZ Partnership, but immediately thereafter, the entire business was sold for an amount equal to the recorded capital of the partnership. Under what conditions would the amo

> Explain the bonus procedure for recording an investment in a partnership. When is the bonus applicable to old partners, and when is it applicable to new partners?

> Why is the goodwill procedure best described as a revaluation procedure?

> How does the purchase of an interest from existing partners differ from the acquisition of an interest by investment in a partnership?

> The concept of partnership dissociation has a technical meaning under the provisions of UPA. Explain the concept.

> What defines a business as a partnership? What factors need to be examined to determine if an individual is a partner, and not some other type of participant in the business?

> Under what circumstances can a partnership expel a partner?

> A summary of changes in the capital accounts of the Kat, Lyn, and Mol partnership for 2016, before closing partnership net income to the capital accounts, is as follows: REQUIRED: Determine the allocation of the 2016 net income to the partners under ea

> The partnership agreement of Ale, Car, and Eri provides that profits are to be divided as follows: 1. Ale is to receive a salary allowance of $10,000 for managing the partnership business. 2. Partners are to receive 10 percent interest on average capital

> Distinguish between indirect holding affiliation structures and mutual holding affiliation structures.

> The partnership of Mor and Osc is being dissolved, and the assets and equities at book value and fair value and the profit- and loss-sharing ratios at January 1, 2016, are as follows: Mor and Osc agree to admit Tre into the partnership for a one-third

> Ell, Far, and Gar are partners who share profits and losses 30 percent, 30 percent, and 40 percent, respectively, after Ell and Far each receive a $32,000 salary allowance. Capital balances on January 1, 2016, are as follows: Ell (30%)..................

> Tim and Las have been operating an accounting firm as partners for a number of years, and at the beginning of 2016, their capital balances were $60,000 and $75,000, respectively. During 2016, Tim invested an additional $10,000 on April 1 and withdrew $6,

> A condensed balance sheet for the Pet, Qua, and She partnership at December 31, 2016, and their profitand loss-sharing percentages on that date are as follows: On January 1, 2017, the partners decided to bring Tom into the partnership for a one-fourth

> The partnership of Par and Boo was formed and commenced operations on March 1, 2016, with Par contributing $30,000 cash and Boo investing cash of $10,000 and equipment with an agreed-upon valuation of $20,000. On July 1, 2016, Boo invested an additional

> Har, Ion, and Jer formed a partnership on January 1, 2016, with each partner contributing $20,000 cash. Although the partnership agreement provided that Jer receive a salary of $1,000 per month for managing the partnership business, Jer has never withdra

> The AT Partnership was organized several years ago, and on January 1, 2016, the partners agree to admit Car for a 40 percent interest in capital and earnings. Capital account balances and profit- and loss-sharing ratios at January 1, 2016, before the adm

> Three partners, Pat, Mic, and Hay, have capital balances and profit-sharing ratios at December 31, 2016, as follows: On January 1, 2017, Con invests $85,080 in the business for a one-sixth interest in capital and income. REQUIRED: 1. Prepare journal e

> The capital accounts of the Ann, Bob, and Car partnership at December 31, 2016, together with profitand loss-sharing ratios, are as follows: Ann (25%)............................ $75,000 Bob (25%)............................. 100,000 Car (50%)..........

> The partnership of Add and Bal is adding a new partner, Cat, and its assets and equities at book value and fair value just prior to her admission to the partnership on January 1, 2016, are as follows: On January 2, 2016, Add and Bal take Cat into the p

> What is an indirect holding of the stock of an affiliate?

> The partnership of Jon, Kel, and Gla was created on January 2, 2016, with each of the partners contributing cash of $30,000. Reported profits, withdrawals, and additional investments were as follows: The partnership agreement provides that partners are

> Capital balances and profit- and loss-sharing ratios of the partners in the BIG Entertainment Galley are as follows: Ben capital (50%)............................ $900,000 Irv capital (30%)................................ 680,000 Geo capital (20%)......

> On December 31, 2016, the total partnership capital (assets less liabilities) for the Bir, Cag, and Den partnership is $186,000. Selected information related to the pre-closing capital balances follows: REQUIRED: Prepare a statement of partnership capi

> The partnership agreement of Dan, Hen, and Bai provides that profits are to be divided as follows: ■ Bai receives a salary of $24,000, and Hen receives a salary of $18,000 for time spent in the business. ■ All partners receive 10 percent interest on aver

> Mel and Dav created a partnership to own and operate a health-food store. The partnership agreement provided that Mel receive a salary of $10,000 and Dav a salary of $5,000 to recognize their relative time spent in operating the store. Remaining profits

> Arn, Bev, and Car are partners who share profits and losses 30:30:40, respectively, after Bev, who manages the partnership, receives a bonus of 10 percent of income, net of the bonus. Partnership income for the year is $198,000. REQUIRED: Prepare a sche

> Car and Lam establish an equal partnership in both equity and profits to operate a used-furniture business under the name of C&L Furniture. Car contributes furniture inventory that cost $120,000 and has fair value of $160,000. Lam contributes $60,000 cas

> The Cas, Don, and Ear partnership balance sheet and profit and loss percentages at June 30, 2016, are summarized as follows: On July 1, 2016, the partners agree that Cas is to retire immediately and receive $161,000 for her partnership interest. REQUI

> After operating as partners for several years, Gro and Ham decided to sell one-half of each of their partnership interests to Lot for a total of $70,000, paid directly to Gro and Ham. At the time of Lot’s admittance to the partnership, Gro and Ham had ca

> The partnership agreement of Kra, Lam, and Man provides for the division of net income as follows: 1. Lam, who manages the partnership, is to receive a salary of $11,000 per year. 2. Each partner is to be allowed interest at 10 percent on beginning capit

> Describe the concept of a constructive retirement of parent stock. Should the parent adjust its equity accounts when its stock is constructively retired?

> 1. Partners All, Bak, and Coe share profits and losses 50:30:20, respectively. The balance sheet at April 30, 2016, follows: The assets and liabilities are recorded and presented at their respective fair values. Jon is to be admitted as a new partner w

> 1. Cob, Inc., a partner in TLC Partnership, assigns its partnership interest to Ben, who is not made a partner. After the assignment, Ben asserts the rights to: I. Participate in the management of TLC II. Cob’s share of TLC’s partnership profits Ben is c

> 1. Shi purchased an interest in the Ton and Olg partnership by paying Ton $40,000 for half of his capital and half of his 50 percent profit-sharing interest. At the time, Ton’s capital balance was $30,000 and Olg’s cap

> 1. Bil and Ken enter into a partnership agreement in which Bil is to have a 60 percent interest in capital and profits and Ken is to have a 40 percent interest in capital and profits. Bil contributes the following: There is a $30,000 mortgage on the bu

> The capital account balances and profit- and loss-sharing ratios of the Byd, Box, Dar, and Fus partnership on December 31, 2016, after closing entries are as follows: Byd (30%)............................ $30,000 Box (20%)..............................

> Kat and Edd formed the K & E partnership several years ago. Capital account balances on January 1, 2016, were as follows: Kat................................... $496,750 Edd.................................. $268,250 The partnership agreement provides

> A balance sheet at December 31, 2016, for the Bec, Dee, and Lyn partnership is summarized as follows: Dee is retiring from the partnership. The partners agree that partnership assets, excluding Dee’s loan, should be adjusted to their

> Capital balances and profit- and loss-sharing ratios for the Nix, Man, and Per partnership on December 31, 2016, just before the retirement of Nix, are as follows: Nix capital (30%)................................... $128,000 Man capital (30%)..........

> Capital balances and profit-sharing percentages for the partnership of Man, Eme, and Fot on January 1, 2016, are as follows: Man (36%)............................ $140,000 Eme (24%).............................. 100,000 Fot (40%)........................

> The capital balances and profits- and loss-sharing percentages for the Sip, Jog, and Run partnership at December 31, 2016, are as follows: Sip capital (30%)............................ $160,000 Jog capital (50%)........................... $180,000 Run c

> Are the treasury stock and conventional approaches equally applicable to all mutual holdings? Explain.

> Bow and Mon are partners in a retail business and divide profits 60 percent to Bow and 40 percent to Mon. Their capital balances at December 31, 2016, are as follows: Bow capital................................... $120,000 Mon capital...................

> The capital accounts of the Fax and Bel partnership on September 30, 2016, were: Fax capital (75% profit)..................... $140,000 Bel capital (25% profit).......................... 60,000 Total capital........................................ $200,

> Revenue information for Mahoney Corporation is as follows: Consolidated revenue (from the income statement).............. $400,000 Intersegment sales and transfers.................................................. 80,000 Combined revenues of all industr

> What is the difference between the integral theory and the discrete theory with respect to interim financial reporting?

> Describe the 10 percent revenue test for determining reportable segments.

> Describe the 10 percent operating-profit test for determining reportable segments.

> How are the segments that are not reportable segments handled in the required disclosures of FASB ASC Topic 280?

> What is a reportable segment according to FASB ASC Topic 280? What criteria are used in determining what operating segments are also reportable segments?

> What is an operating segment?

> Describe the minimum financial information to be disclosed in interim reports under the provisions of FASB ASC Topic 270.

> P owns 80 percent of S1, and S1 owns 70 percent of S2. Separate incomes of P, S1, and S2 are $20,000, $10,000, and $5,000, respectively, for 2016. During 2016, S1 sold land to P at a gain of $1,000. Compute S1’s income on an equity basis. Discuss why you

> Explain how a company estimates its annual effective tax rate for interim reporting purposes.

> Do the requirements of FASB ASC Topic 280 apply to financial statements for interim periods? If so, how?

> Must a major customer be identified by name?

> When is an enterprise required to include information in its financial statements about its foreign and domestic operations?

> What disclosures are required for the reportable segments and all remaining segments in the aggregate?

> Assume that an enterprise has 10 operating segments. Of these, five segments qualify as reportable segments by passing one of the 10 percent tests. However, their combined revenues from sales to unaffiliated customers total only 70 percent of the combine