高级会计学(第10版)教师手册Beams10e_IM_11.pdf

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1、 2009 Pearson Education,Inc.publishing as Prentice Hall 166 Chapter 15 PARTNERSHIPS-FORMATION,OPERATIONS,AND CHANGES IN OWNERSHIP INTERESTS Chapter Outline NATURE OF PARTNERSHIP ORGANIZATION A Partnership is defined as an association of two or more persons to carry on as co-owners of a business for

2、profit.B Characteristics 1 Limited life-the legal life of a partnership terminates with the admission of a new partner,withdrawal or death of an old partner,voluntary dissolution by the partners,or involuntary dissolution.2 Mutual agency-each partner is assumed to be an agent for the partnership wit

3、h the power to bind all the other partners by his/her actions on behalf of the partnership.3 Unlimited liability-each partner is liable for all partnership debts.C Articles of partnership(the partnership agreement)should be written(but oral agreements may be legal and binding)1 The agreement should

4、specify The types of products and services to be provided and other details of the business,Rights and responsibilities of partners,Initial investments and provisions for additional investments,Asset drawing provisions,Profit and loss sharing formulas,and Procedures for dissolving the partnership 2

5、Profits and losses are divided equally if there is no specific partnership agreement.D Partnerships do not pay federal income taxes,but the IRS requires filing of a financial information return 2009 Pearson Education,Inc.publishing as Prentice Hall 167 E Partners own their share of the partnership b

6、ut do not have ownership shares in the individual assets of the entity.INVESTMENTS AND DISINVESTMENTS(Illustration 15-1)A Initial investments 1 All property brought into the partnership or acquired by the partnership is partnership property.2 Initial investment is recorded in the partners capital ac

7、counts at its fair value at the time of transfer to the partnership.3 Unidentifiable assets in initial investment arise when partners agree on relative capital interests not aligned with investments of identifiable assets a Under the bonus approach,the unidentifiable asset is not recorded on the par

8、tnership books and the capital accounts are adjusted to meet the conditions of the partnership agreement That is,the other partners give a“bonus”to the incoming partner whose share of capital exceeds his investment b Under the goodwill approach,the unidentifiable asset is measured and recorded by re

9、ference to the total partnership capital implied by the other partners investment divided by the other partners interest The goodwill the incoming partner brings to the partnership which allowed him to receive capital in excess of his investment is recorded B The same valuation rules apply for addit

10、ional investments as apply for initial investments.C Withdrawals are large and irregular disinvestments charged directly to partners capital accounts.D Drawings,drawing allowances,and salary allowances are 1 Regular amounts that are withdrawn in anticipation of profits and charged to individual part

11、ner drawings accounts.2009 Pearson Education,Inc.publishing as Prentice Hall 168 2 Closed to the capital accounts at the end of each accounting period,before preparation of the partnership balance sheet.E Loans and advances 1 Loans made to the partnership by a partner earn interest and are considere

12、d liabilities of the partnership.2 Loans made to a partner by the partnership are partnership assets PARTNERSHIP OPERATIONS A Financial statements of a partnership include a balance sheet,an income statement,a statement of partnership capital,and a statement of cash flows.B Profit and loss sharing a

13、greements provide for the division of profits.1 Salaries and bonuses to partners and interest on capital accounts are not expenses and do not affect the measurement of partnership income.2 The order of the partnership agreement is followed regardless of the income or loss experienced by the partners

14、hip.3 Absent a specific agreement,losses are divided the same as profits.4 Capital to be considered in profit and loss sharing agreements may be beginning,ending,or average capital balances.Average capital means weighted average unless otherwise specified in the partnership agreement.CHANGES IN PART

15、NERSHIP INTERESTS A Assignment of an interest:1 The partnership is not dissolved.2 An assignee does not become a partner.3 The assignee is entitled to partners share of profits and losses and a share of partnership assets in the event of liquidation.4 The only accounting necessary is to record the c

16、apital transfer from the assignor to the assignee.B Admission of a new partner,either by purchasing an interest from old partners or investing in an existing partnership 2009 Pearson Education,Inc.publishing as Prentice Hall 169 1 Admission of a new partner requires consent of all existing partners

17、2 The old partnership is dissolved.3 A new partnership agreement is developed.4 Absent a new agreement,profits and losses are divided equally among the partners.C Purchase of an interest from existing partners 1 The partnership receives no new capital.2 Revaluation/goodwill procedure a The revaluati

18、on should be completed before the admission of the new partner.b Since the partnership receives no money,the amount paid to the old partners provides little evidence for revaluation and appraisals must be relied on for an equitable distribution of total partners capital.c Identifiable assets and lia

19、bilities are revalued before goodwill is recorded(and existing partner capital accounts are increased at the same time).d An entry is made to transfer capital from the selling partner(s)to the new partner.3 Nonrevaluation/bonus procedure a The bonus procedure requires an entry be made to transfer ca

20、pital of old partners to the new partners capital account.b Without revaluation,the new partners capital account may not equal his or her payments to the old partners.INVESTING IN AN EXISTING PARTNERSHIP A The old partnership is legally dissolved.B Noncash investments are valued using the same valua

21、tion techniques as used for initial investments.2009 Pearson Education,Inc.publishing as Prentice Hall 170 C Investment of the new partner is recorded under the provisions of the new partnership agreement.D Basis for revaluation of the partnership 1 If the new partners capital interest in the total

22、of the old capital plus new investment is less than the new partners investment,there is an implication that the old partnership had unrecorded asset value.(Illustration 15-2)a Revaluation is determined by dividing the new partners capital investment by his or her interest in the new partnership.b T

23、he unrecorded asset value may be recognized by the goodwill or bonus approach.(1)Goodwill approach (a)The difference between the implied value and the total of the old capital plus the new investment is goodwill.(b)The goodwill is divided among the old partners in their old profit and loss sharing r

24、atios before the admittance of the new partners.(2)Under the bonus approach,the assets are not revalued,but the difference between the new partners investment and his/her capital credit is divided among the old partners in their old profit sharing ratios.2 If the new partners capital interest in the

25、 total of the old capital plus new investment is greater than the new partners investment,there is an implication that the new partner is bringing unidentifiable assets into the partnership.(Illustration 15-3)a The total capital of the new partnership is determined by dividing the old partners capit

26、al by the old partners interest retained in the new partnership.b The unidentifiable asset value from the incoming partner can be recognized by either the goodwill or the bonus approach.(1)Under the goodwill approach,assets are revalued to their fair values and goodwill to the new partner is recorde

27、d.2009 Pearson Education,Inc.publishing as Prentice Hall 171 (2)Using the bonus approach (a)Assets are not revalued (b)Capital balances of the old partners are reduced for the bonus to the new partner and the new partners capital account is recorded according to the partnership agreement.DISSOLUTION

28、 OF A CONTINUING PARTNERSHIP THROUGH DEATH OR RETIREMENT A The old partnership is dissolved and the retiring partner(or estate of a deceased partner)receives a settlement.Partner can dissociate at any time.B If the partnership agreement does not specify a settlement.1 Buyout price=amount that would

29、have been distributable to the dissociating partner if assets were sold equal to the greater of liquidation value or value based on sale of entire business.2 The retiring partner,or estate of the deceased partner,receives that amount plus interest as an ordinary creditor.a If there is a time lapse b

30、etween the dissolution and settlement dates,the capital balance is reclassified as a liability.b Any interest on the liability up to the settlement date is an expense of the partnership.C Recording the settlement with a retiring or deceased partner:1 If the retiring partner receives an amount equal

31、to his or her final capital balance,the only entry is a debit to the capital account and a credit to cash.2 If the retiring partner receives more than the balance in his or her capital account,an undervaluation of the partnership on the partnership books is implied.The excess payment can be recorded

32、 in one of three ways a If a bonus is paid to the retiring partner,the excess payment to the retiring partner is charged to the remaining partners in their relative profit sharing ratios.2009 Pearson Education,Inc.publishing as Prentice Hall 172 b If goodwill is to be recorded,and only goodwill equa

33、l to the excess payment to the retiring partner is to be recorded,then only the retiring partners share of partnership assets is revalued.c If total implied goodwill is to be recorded,a revaluation of total partnership capital based on the excess payment to the retiring partner (1)A total undervalua

34、tion of the partnership is determined by dividing the excess payment to the retiring partner by the retiring partners profit-sharing ratio.(2)The goodwill is recorded and credited to all partners capital accounts before settlement with the retiring partner.3 If the retiring partner receives less tha

35、n the balance of his or her account,the partners may agree that the partnership is worth less than its book value.a Overvalued assets should be written down to fair values in the partners profit-sharing ratios before settlement with the retiring partner.b If a bonus to continuing partners is to be r

36、ecorded,a bonus equal to the excess of the retiring partners capital account over the cash paid by the partnership in settlement of the retiring partners interest is credited to the continuing partners capital account balances in their relative profit-sharing ratios.LIMITED PARTNERSHIPS A The unlimi

37、ted liability characteristic is circumvented in this instance.1 The limited partnership consists of at least one general partner,who has unlimited liability,and one or more limited partners whose risk is limited to their equity interest in the venture.2 The limited partner is excluded from the manag

38、ement of the entity.B The partnership agreement must be written,signed by the partners,and filed with the appropriate state agency.2009 Pearson Education,Inc.publishing as Prentice Hall 173 Description of assignment material Minutes Questions(15)Exercises(21)E15-1 Carson/Lamb Calculate inequity on i

39、nitial investment 10 E15-2 Arnold/Beverly/Carolyn Income allocation with bonus to Beverly 12 E15-3 Melanie/David Income allocation with error from the previous year 10 E15-4 Cari/Helen/Brandie Income allocation with salary allowance and 15 interest on average capital balances E15-5 Bird/Cage/Dean St

40、atement of partnership capital 20 E15-6 Benson/Irvin/George Assignment of an interest 10 E15-7 Faxon/Bell/Roberts Admission of partner(payment to existing partners)12 E15-8 Bowen/Monita/Johnson Journal entries for admission of partner 16 (payment to existing partners;assets are revalued)E15-9 Sprint

41、/Jog/Run/Walk Journal entries for admission of partner 20 (investment in partnership;assets revalued)E15-10 Manda/Emeril/Fotenot/Boudreaux Determine partners capital balances 20 and profit and loss sharing ratios after admission of partner(investment in the partnership;assets are not revalued)E15-11

42、 Nixon/Mann/Peter Journal entries for retirement of partner(assets 15 revalued)E15-12 Beck/Dee/Lynn Determine capital balances after retirement of a 15 partner with a loan balance E15-13 Kathy/Eddie Income allocation with salary and bonus 10 E15-14 Bydon/Boxer/Danner/Foust Journal entries to record

43、retirement of 20 a partner E15-15 5 MC problem-type questions 25 E15-16 5 MC problem-type questions 25 E15-17 AICPA 5 MC problem-type questions 25 E15-18 AICPA 7 MC problem-type questions 35 E15-19 Kray/Lamb/Mann Statement of partners capital 25 E15-20 Grosby/Hambone/Iota Computations(admission of n

44、ew partner)15 E15-21 Case/Donley/Early Journal entries for retirement of partner under 20 three assumptions Problems(14)P15-1 Ellen/Fargo/Gary Prepare a statement of partnership capital 25 P15-2 Mortin/Oscar/Trent Prepare a balance sheet after the admission of a 20 new partner(noncash investment;ass

45、ets revalued)P15-3 Ashe/Barbour Income distribution schedule(allocation includes 16 interest,salary,bonus)P15-4 Alex/Carl/Erika Income allocation schedule with loss,statement of 40 partners capital,and correcting journal entries 2009 Pearson Education,Inc.publishing as Prentice Hall 174 P15-5 Katie/

46、Lynda/Molly Income and loss allocation under three 35 assumptions(capital balances,bonus,interest)P15-6 Jones/Keller/Glade Computations and correcting entry(income 60 allocation over three years with errors)P15-7 Addie/Bailey/Cathy Journal entries and balance sheet(admission of 20 partner)P15-8 Ann/

47、Bob/Carrie/Darling Admission of partner under 4 independent 30 assumptions P15-9 Pat/Mike/Hay/Con Journal entries(investment in a partnership vs.35 purchase of an interest)P15-10 Aida/Thais/Carmen Journal entries(admission of a partner under 25 four assumptions)P15-11 Harry/Iona/Jerry Statement of p

48、artnership capital for two years 40 (incomplete records)P15-12 Parker/Boone Schedules and statement of partners capital 50 (alternative profit sharing agreements)P15-13 Peter/Quarry/Sherel Journal entries for admission of new partner 45 (three situations and alternative revaluation and nonrevaluatio

49、n assumptions)P15-14 Timmy/Lassie Allocate income to partners and determine average 20 capital balances(partnership net income is not given)Internet Assignment:Answer a series of questions regarding the publicly-traded limited partnership of Cedar Fair,L.P.2009 Pearson Education,Inc.publishing as Pr

50、entice Hall 175 Illustration 15-1 SUMMARY OF PARTNERSHIP ORGANIZATION AND OPERATIONS Partnership formation*Noncash assets invested in a partnership are recorded at their fair values(i.e.,present values for receivables and current cost for inventories and other assets.*Partner liabilities assumed in