a. The partner is required to contribute personal assets to the partnership to s
ID: 2437832 • Letter: A
Question
a. The partner is required to contribute personal assets to the partnership to settle b. if the partner is insolvent, his/her debit capital balance can be allocated to the rest of the partners When, upon the liquidation of the partnership, a partner has a debit capital balance who have credit capital balances None of these statements is true. Both A and B are true. c. d. 30 When a parent sells merchandise to the subsidiary a The sales and cost of goods sold accounts are reduced by the value of intercompany sales of merchandise for the period The unrealized profit on ending inventory of intercompany merchandise is deducted in the income distribution schedule of the parent and added in the income distribution schedule of the subsidiary b. c. The realized profit on beginning inventory of intercompany merchandize is deducted in the income d. e. distribution schedule of the parent (ie., seller). All of these statements are correct None of these statements is correct. 31. When the subsidiary sells a depreciable asset to the parent The gain or loss on sale of the asset will be realized gradually over the remaining life of the asset. The asset will be shown on the consolidated balance sheet at its fair value at the end of the current year a. b. c. The total amount of the gain or loss on sale (e selling prike - book value on date of sale) has to be eliminated in the consolidation worksheet every year d. None of these is correct ABC company purchased the net assets of XYZ company for $680,000. On the date of acquisition, XXZ had ABC to record the acquisition of XYZ. 32. assets (other than goodwill) with a book value of $1,000,000 and a fair value of $1,050,000, and liabilities with a book and fair value of $350,000. Which of the following should be included in the entry prepared by a. Debit Assets $1,050,000 b. Debit Investment in XYZ $1,050,000 c. Debit Gain on Acquisition of Business $20,000 d. Debit Goodwill $20,000 e. Both A and C 33. At the beginning of 2017, Gama Company acquired Delta Company and recorded goodwill of $110,000. At the end of 2017, the fair value of the company was $1,000,000, the fair value of net identifiable assets was $950,000, and the book value of net assets was $1,030,000. What is the value of goodwill that should be reported on the consolidated financial statements at the end of 2017? a. $60,000 b. $0 c. $110,000 d. $50,000Explanation / Answer
Answer
29, Option : d. Both A and B are true.
In a partnership the partners are jointly and severally liable for any debts of the partnership firm and they are personally liable for any debts of the partnership firm because partnership firm is not a legal entity.
30. Option : d. All of these statements are correct.
When a parent company sells merchandise to its subsidiaries then all the above adjustments are to be considered.
31, Option : b.
When a subsidiary sells a depreciable asset to it's parent then the asset will be shown on the consolidated balance sheet at its fair value at the end of the current year.
32, Option : a. Debit assets $ 1,050,000.
ABC company to record the fair value of assets on the debit side and gain arising on acquisition of business on the credit side.
33, Option : c. $110,000.
Goodwill that should be reported on the consolidated balance sheet at the end of 2017 is $110,000.
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