... | | | | | | | | | | Date | | Account Titles and Explanation | P. R. | Debit | Credit | a. | | Other Assets - Starting balance | | | 106,000 | | | | | Sale of Other Assets | | | | 85,000 | | | | | Balance Remaining; Loss | | 21,000 | | | | | | | | | | | | | | $21,000 divided by total of all ratios 10 = $2,100 | | | | | | Sand has 1 share of the partnership | | | | | | | 2,100 x 1 = 2,100 | | | | | | | | Mell has 4 shares of the partnership | | | | | | | 2,100 x 4 = 8,400 | | | | | | | | Rand has 5 shares of the partnership | | | | | | | 2,100 x 5 = 10,500 | | | | | | | | | | | | | | | | b. | | Sand - Starting balance | | | | | 1,200 | | | | Deducting Sand's share of loss | | 2,100 | | | | | Deficit balance of capital account | | -900 | | | | | | | | | | | | | | Mell - Starting balance | | | | | 11,700 | | | | Deducting Mell's share of loss | | 8,400 | | | | | Balance of capital account | | | 3,300 | | | | | | | | | | | | | Rand - Starting balance | | | | | 15,100 | | | | Deducting Rand's share of loss | | 10,500 | | | | | Balance of capital account | | | 4,600 | | | | | | | | | | | c....
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... | |DISSOLUTION AND LIQUIDATION OF A PARTNERSHIP | | | | | |Multiple Choice Questions | LO1 |1. | |Which statement is correct in describing the rank order of payments as specified by the Uniform Partnership Act? | | | | | | | | |a. |Payments to partners with loans to the partnership are ranked equally with payments to other creditors. | | | |b. |Payments to partners with loans to the partnership are ranked ahead of payments to partners without loans to the | | | | |partnership. | | | |c. |Payments to other creditors are ranked ahead of payments to partners with loans to the partnership. | | | |d. |After payments are...
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...GAAP ACCOUNTING FOR PARTNERSHIPS Formation [i]. The Revised Uniform Partnership Act defines a partnership as a. Any association of two or more persons or entities. b. An association of two or more persons to carry on as co-owners a business for profit. c. A separate legal entity for most legal purposes. d. An entity created by following statutory requirements. Gleim [ii]. The partnership agreement is an express contract among the partners (the owners of the business). Such an agreement generally does not include a. A limitation on a partner’s liability to creditors. b. The rights and duties of the partners. c. The allocation of income between the partners. d. The rights and duties of the partners in the event of partnership dissolution. Gleim *. A partnership records a partner’s investment of assets in the business at a. The market value of the assets invested. b. A special value set by the partners. c. The partner’s book value of the assets invested. d. Any of the above, depending upon the partnership agreement. RPCPA 0598 [iii]. When property other than cash is invested in a partnership, at what amount should the noncash property be credited to the contributing partner’s capital account? a. Fair value at the date of recognition. b. Contributing partner’s original cost. c. Assessed valuation for property tax purposes. d. Contributing partner’s tax basis. AICPA 0594 F-35 [iv]. When property other than...
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...Liability Charles Fial and Roger J. Steeby entered into a partnership called Audit Consultants to perform auditing services. Pursuant to the agreement, they shared equally the equity, income, and profits of the partnership. Originally, they performed the auditing services themselves, but as business increased, they engaged independent contractors to do some of the audit work. Fial’s activities generated approximately 80 percent of the partnership’s revenues. Unhappy with their agreement to divide the profits equally, Fial wrote a letter to Steeby 7 years later, dissolving the partnership. Fial asserted that the clients should be assigned based on who brought them into the business. Fial formed a new business called Audit Consultants of Colorado, Inc. He then terminated the original partnership’s contracts with many clients and put them under contract with his new firm. Fial also terminated the partnership’s contracts with the independent-contractor auditors and signed many of these auditors with his new firm. The partnership terminated about 11 months after Fial wrote the letter to Steeby. Steeby brought an action against Fial, alleging breach of fiduciary duty and seeking a final accounting. Who wins? Steeby v. Fial, 765 P.2d 1081, Web 1988 Colo.App. Lexis 409 (Court of Appeals of Colorado) PARTIES In the Steeby vs. Fial case Roger Steeby is the plaintiff and Charles Fial is the defendant. Steeby and Fial formed a partnership at will to perform auditing services. CASE SUMMARY...
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...to the capital plus the liabilities of the business. Assets = Capital + Liabilities ▪ A balance sheet is a statement of the financial position of a business and a certain date. Chapter: 2 Double Entry Bookkeeping- Part A ▪ Every transaction must be entered twice-on the debit side of one accounting and on the credit side of another account. ▪ The debit entry is made in the account which is receiving the value and the credit entry is made in the account which is giving the value. ▪ Each type of asset, liability, expense and income has its own ledger account. ▪ Any value taken from the business by the owner of the business is known as drawings. ▪ At the end of the period, the accounts of assets and liabilities which contain more than one entry should be balanced. ▪ The entries for purchases and sales and purchases returns and sales returns are recorded in separate accounts. ▪ Carriage is the cost of transporting goods. Chapter: 3 Trial balance ▪ A trial balance is a list of the balance on the accounts in the ledger at a certain date. ▪ A trial balance is prepared to check the arithmetical accuracy of the double entry bookkeeping. ▪ If a trial balance fails to balance, it indicates that an error has...
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...Table of Contents Introduction: 2 P1.1: Accounting in tourism or hospitality organization. 3 P1.2: Difference between financial and management accounting 3 P1.3: Difference between a sole trader, a partnership and a limited company 4 P1.5: Use of financial software in Tourism and Hospitality business 5 P1.6: Impact of changes in IT and internet on hotels and airlines 6 P2.1: Double-entry book-keeping 6 P2.2: Calculattion and account for VAT on purchases and Sales 7 P2.3: Cash receipts, cash payments and bank reconciliation 8 P3.1: How a trial balance is constructed 8 P3.2: Trial balance along with adjustments used to prepare fianl accounts 9 P4.1: Sources of finance available to a business 9 P4.2: Reasons and the process of budgetary control 10 P4.3: How to prepare a simple cash budget 11 Conclusion: 12 References…………………………………………………………………………………………………………………………………………….13 Introduction: Business organizations face intense competition in today’s global business world. Tourism and hospitality are very large industry. A lot business organization is competing for their success in tourism and hospitality industry. The success of business organizations depends mostly on managerial decision making. However managers cannot make proper decisions if there is no information available. Financial information is the most important information for all kinds of business organizations. Without proper...
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...ACC 280 Principles of Accounting Chapter Questions ACC 280 FINAL EXAM - CORRECT ANSWERS http://www.learnyourcourse.com/acc-280/545-acc-280-final-exam-8-chapter-questions.html Chapter 4 1. It is not true that current assets are assets that a company expects to 2. After closing entries are posted, the balance in the owner's capital account in the ledger will be equal to 3. When using a worksheet, adjusting entries are journalized 4. Liabilities are generally classified on a balance sheet as Chapter 5 5. At the beginning of the year, Hinz Company had an inventory of $400,000. During the year, the company purchased goods costing $1,600,000. If Hinz Company reported ending inventory of $600,000 and sales of $2,000,000, the company's cost of goods sold and gross profit rate must be 6. The Merchandise Inventory account is used in each of the following except the entry to record 7. On a classified balance sheet, merchandise inventory is classified as 8. The Sales Returns and Allowances account does not provide information to management about Chapter 6 9. Merchandise inventory is 10. Lee Industries had the following inventory transactions occur during 2010: 11. The company sold 51 units at $63 each and has a tax rate of 30%. Assuming that a periodic inventory system is used, what is the company's gross profit using LIFO? (rounded to whole dollars) 12. Shandy Shutters has the following inventory information. Nov. | 1 | |...
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...Chapter 15 Partnerships: termination and liquidation Answers to Questions 1. A dissolution refers to the cessation of a partnership. In many cases, this process is simply a preliminary step in the transfer of business property to a newly formed partnership. Therefore, a dissolution does not necessarily affect the operations of the business. In a liquidation, however, actual business activities must cease. Partnership property is sold with the remaining cash distributed to creditors and to any partners with positive capital balances. Dissolution refers to changes in the composition of a partnership whereas liquidation is the selling of a partnership's assets. 2. Many reasons can exist that would lead to the termination and liquidation of a partnership. The business might simply have failed to generate sufficient profits or the partners may elect to enter other lines of work. Liquidation can also be required by the death, retirement, or withdrawal of one of the partners. In such cases, liquidation is often necessary to settle the partner's interest in the business. The bankruptcy of an individual partner can also force the termination of the business as can the bankruptcy of the partnership itself. 3. During the liquidation process, monitoring the balance of the partners' capital accounts becomes of paramount importance. That amount will eventually indicate either the cash to be received by the partners as final distributions or the additional contributions...
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...Chapter 15 Partnerships: termination and liquidation Answers to Questions 1. A dissolution refers to the cessation of a partnership. In many cases, this process is simply a preliminary step in the transfer of business property to a newly formed partnership. Therefore, a dissolution does not necessarily affect the operations of the business. In a liquidation, however, actual business activities must cease. Partnership property is sold with the remaining cash distributed to creditors and to any partners with positive capital balances. Dissolution refers to changes in the composition of a partnership whereas liquidation is the selling of a partnership's assets. 2. Many reasons can exist that would lead to the termination and liquidation of a partnership. The business might simply have failed to generate sufficient profits or the partners may elect to enter other lines of work. Liquidation can also be required by the death, retirement, or withdrawal of one of the partners. In such cases, liquidation is often necessary to settle the partner's interest in the business. The bankruptcy of an individual partner can also force the termination of the business as can the bankruptcy of the partnership itself. 3. During the liquidation process, monitoring the balance of the partners' capital accounts becomes of paramount importance. That amount will eventually indicate either the cash to be received by the partners as final distributions or the additional contributions...
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...Fair Shares what the outgoing Partner can expect 03 July 2006 Problems are posed where, after dissolution, a partnership business is continued by one partner. Such problems are longstanding. Frequently a husband and wife have run a business as partners (often without a Deed of Partnership). Following the breakdown of their marriage, one of them leaves whilst the other continues the business. This frequently raises the issue as to liability for the income earned from the business which is continued by the remaining spouse. As a matter of elementary fairness, it seems unjust that the partner continuing the business should benefit both from having the facility of the business and the income it can produce. Section 42 Partnership Act 1890 seeks to facilitate justice entitling the partner who has ceased operating the business, to "such share of the profits... as the court may find to be attributable to the use of his share of the assets of the partnership...". The problem always is how that share of the assets is to be assessed. The recent Court of Appeal decision in Sandhu -v- Gill [2006] 2 WLR 8 provides useful guidance. In that case, Messrs Sandhu and Gill ("S" and "G") agreed to open the business as a residential home for the elderly. To that end a property was purchased for £171,000. The partnership deed entered into provided that both partners should contribute half of the purchase price of the property each (£85,000). It was specifically laid down that whilst G had paid the...
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...reveled us the great idea to influence our trends and intelligence while analyzing the entire details of Sunflower Nutraceuticals (SNC) company followed with all the decisions of the company which tends to increase their working capital and maximizing the overall organizational growth potentially with respect to time, as we have figured out the data and change in numbers below which reflects the growth annually. Moreover in addition to various details of the SNC firm we have also examined various decisions which took place in each of the phase of SNC’s simulation which has an estimated values to figure out the results, secondly the paper also describes how SNC’s decisions are influenced with respect to their working capital followed with the final step of evaluating the general affects associated with the limited access of financial mix. Sunflower Nutraceuticals (SNC) Background No wonder SNC is a privately owned Nutraceuticals company , more over one can say it is a wide distributor which provides all the vital dietary supplements such as herbs for women’s, vitamins, and minerals for all the consumers (mainly women’s), distributors and retailers. (Harvard Business School Publishing, 2012). Once the business was initiated after 2006, SNC expanded their operations and came up with various retail outlets in the nutraceutical industry and moreover has been successful while introducing their own brands of sports drinks, vitamins for teenagers, metabolism- boosting powders, etc and...
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...Working Capital Simulation: Managing Growth FIN/571 October 13, 2014 William Stokes Working Capital Simulation: Managing Growth The Corporate Finance course has helped me, as a student, gain intelligence to make informed decisions upon analyzing the details for Sunflower Nutraceuticals (SNC). These decisions will influence the company’s overall growth annually. In addition to various details of the SNC Company I have also made various decisions in each of the phases of SNC’s simulation which has an estimated values to figure out the results. This paper also explains how SNC’s decisions are influenced with regards to the working capital followed with the final step of evaluating the general affects associated with the limited access of financial mix. Sunflower Nutraceuticals (SNC) Background Sunflower Nutraceuticals is a privately owned company that is a wide distributor providing numerous dietary supplements for customers, distributors, and retailers (University of Phoenix, 2013). After starting the business in 2006 as an internet based company, SNC expanded operations into retail outlets as well as introducing some new private labeled products. Although SNC has the potential to grow into one of the major nutraceutical distributors in the industry, the company still struggles to break even. On more than one occasion SNC has been forced to exceed the company’s credit line of $1,000,000 to finance payroll and other operational needs. SNC has a somewhat restrictive...
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...PARTNERSHIP AGREEMENT of the [Name] Investment Club This AGREEMENT of PARTNERSHIP is made as of [Date], by and between the undersigned Partners. Formation The undersigned hereby form a General Partnership in, and in accordance with the laws of, the State of [State]. Name The name of the Partnership shall be [Partnership Name]. Term The Partnership shall begin on [Date], and shall continue until [Date] of the same year and thereafter from year to year unless earlier terminated as hereinafter provided. Purpose The purpose of the Partnership shall be to invest the assets of the Partnership in stocks, bonds, and securities for the financial and educational benefit of the Partners, while employing fundamental principles and techniques of sound investment practices. Meetings Periodic meetings shall be held regularly as determined by the Partnership. Capital Contributions The Partners will each make minimum monthly investments of $[Amount] at regular monthly meetings. Partners may also make optional additional contributions in any $[Amount] increment(s). Regular monthly contributions, normally collected at meetings, are due prior to the scheduled meeting in the case of any planned absence, or by the end of the third day after the meeting from anyone who was unable to attend that monthly meeting due to an emergency or illness. No Partner's capital account shall exceed twenty percent (20%) of the capital accounts of all Partners. Valuation of the Partnership The current...
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...inventory on December 1, 2011, with payment of 10,000 British pounds to be received in sixty days. The pertinent exchange rates were as follows: 2. For what amount should Sales be credited on December 1? A. $5,500. B. $16,949. C. $18,182. D. $17,241. E. $16,667. 3. What amount of foreign exchange gain or loss should be recorded on December 31? A. $300 gain. B. $300 loss. C. $0. D. $941 loss. E. $941 gain. Use the following information for questions 4-6 Brisco Bricks purchases raw material from its foreign supplier, Bolivian Clay, on May 8. Payment of 2,000,000 foreign currency units (FC) is due in 30 days. May 31 is Brisco’s fiscal year-end. The pertinent exchange rates were as follows: 4. For what amount should Brisco’s Accounts Payable be credited on May 8? A. $2,500,000. B. $2,440,000. C. $1,600,000. D. $1,639,344. E. $1,666,667. 5. How much Foreign Exchange Gain or Loss should Brisco record on May 31? A. $2,520,000 gain. B. $20,000 gain. C. $20,000 loss. D. $80,000 gain. E. $80,000 loss. 6. How much US $ will it cost Brisco to finally pay the payable on June 7?...
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...common reasons by which accounting errors may be occur. The person who keeping the books of account must be responsible to his/her job when he/she is careless or not serious may cause such errors happen. Lack of Knowledge - Accounting is based on certain principles and rules. Due to the lack of knowledge of the accounting principles and rules, accounting errors may be occurs. Dishonest of records - If the person who is responsible for keeping books of account is dishonest, he/she may intentionally commit errors in the books of account for the purpose of taking undue advantage. Computer and Software Errors - A professional firm keeps its account records in computer. However, defective computer program and easy access to unauthorized person to the accounting program may also result in the accounting errors. Most of the firm did not update their accounting software may cause many errors in their accounting program. Question 2 Lack of Knowledge - For accountant who is lack of knowledge must take part-time course to update their knowledge which helps in accounting. Besides that, the firm also must providing more training and practice for accountants to update their knowledge and experience to improve their efficiency in his/her job. Carelessness - For person who is newly involved in accounting firm, advice he/she must double check their account works to avoid careless in account records. Senior accountants should give more opinion on which common mistake or careless...
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