Questions from Advanced Accounting

Q: The goodwill procedure was used to record the investment of a new

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 o...

Q: Parent Company owns 70 percent of the voting stock of Subsidiary A

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...

Q: Bob invests $10,000 cash for a 25 percent interest

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...

Q: Explain why the noncash investments of partners should be recorded at their

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

Q: Is there a conceptual difference between partner drawings and withdrawals? Is

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

Q: Explain how a partner could have a loss from partnership operations for

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

Q: When a profit-sharing agreement specifies that profits should be divided

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

Q: If a partner sells his or her partnership interest directly to a

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?

Q: What alternative approaches can be used in recording the admission of a

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

Q: In the absence of an agreement for the division of profits,

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...