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Problem 44

The document discusses accounting principles related to partnerships. It states that the accounting for assets and liabilities differs between partnerships and sole proprietorships or corporations. Partnerships are relatively easy to form but also easy to dissolve. When partners contribute assets to the partnership, their capital accounts are credited based on the assets' fair values rather than their historical costs. Bonuses given to partners reduce other partners' capital accounts.

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Arian Amurao
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565 views2 pages

Problem 44

The document discusses accounting principles related to partnerships. It states that the accounting for assets and liabilities differs between partnerships and sole proprietorships or corporations. Partnerships are relatively easy to form but also easy to dissolve. When partners contribute assets to the partnership, their capital accounts are credited based on the assets' fair values rather than their historical costs. Bonuses given to partners reduce other partners' capital accounts.

Uploaded by

Arian Amurao
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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PROBLEM 1: TRUE OR FALSE

1. The accounting for the assets and liabilities of a partnership business is different from that
of a sole proprie PROBLEM 1: TRUE OR FALSE

1. The accounting for the assets and liabilities of a partnership business is different from that
of a sole proprietorship or a corporation
2. A partnership is relatively easy to form but also easy to dissolve.
3. Mr. A contributed land with historical cost of PIM and fair value of P2M to a partnership
business. Mr. A's contribution shall be valued at PM in the partnership books.
4. A bonus given to a partner is treated as a reduction to the capital account(s) of the other
partner(s).
5. Ms. B contributed equipment with carrying amount of P100 and fair value of P200 to a
partnership. No bonus is given to any partner. In the partnership's books, equipment is
debited for P200 but B's capital account is credited for P100.
6. Mr. C contributed land with fair value of PIM to a partnership. The land has an unpaid
mortgage of P.2M which the partnership agreed to assume. The valuation of Mr. C's net
contribution is P1.2M.

PROBLEM 1: TRUE OR FALSE

1. The accounting for the assets and liabilities of a partnership business is different from that
of a sole proprietorship or a corporation
2. A partnership is relatively easy to form but also easy to dissolve.
3. Mr. A contributed land with historical cost of PIM and fair value of P2M to a partnership
business. Mr. A's contribution shall be valued at PM in the partnership books.
4. A bonus given to a partner is treated as a reduction to the capital account(s) of the other
partner(s).
5. Ms. B contributed equipment with carrying amount of P100 and fair value of P200 to a
partnership. No bonus is given to any partner. In the partnership's books, equipment is
debited for P200 but B's capital account is credited for P100.
6. Mr. C contributed land with fair value of PIM to a partnership. The land has an unpaid
mortgage of P.2M which the partnership agreed to assume. The valuation of Mr. C's net
contribution is P1.2M.

torship or a corporation
2. A partnership is relativ PROBLEM 1: TRUE OR FALSE

1. The accounting for the assets and liabilities of a partnership business is different from that
of a sole proprietorship or a corporation
2. A partnership is relatively easy to form but also easy to dissolve.
3. Mr. A contributed land with historical cost of PIM and fair value of P2M to a partnership
business. Mr. A's contribution shall be valued at PM in the partnership books.
4. A bonus given to a partner is treated as a reduction to the capital account(s) of the other
partner(s).
5. Ms. B contributed equipment with carrying amount of P100 and fair value of P200 to a
partnership. No bonus is given to any partner. In the partnership's books, equipment is
debited for P200 but B's capital account is credited for P100.
6. Mr. C contributed land with fair value of PIM to a partnership. The land has an unpaid
mortgage of P.2M which the partnership agreed to assume. The valuation of Mr. C's net
contribution is P1.2M.

ely easy to form but also easy to dissolve.


3. Mr. A contributed land with historical cost of PIM and fair value of P2M to a partnership
business. Mr. A's contribution shall be valued at PM in the partnership books.
4. A bonus given to a partner is treated as a reduction to the capital account(s) of the other
partner(s).
5. Ms. B contributed equipment with carrying amount of P100 and fair value of P200 to a
partnership. No bonus is given to any partner. In the partnership's books, equipment is
debited for P200 but B's capital account is credited for P100.
6. Mr. C contributed land with fair value of PIM to a partnership. The land has an unpaid
mortgage of P.2M which the partnership agreed to assume. The valuation of Mr. C's net
contribution is P1.2M.

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