1.finish the accounting cycle.
a.adjust the books.
b.determine the nett income/net redness and close the net income/net loss to
mates non bad(p) of the United States accounts.
c.close all nominal accounts.
d.close all drawing accounts to their respective slap-up accounts.
2.sell non-cash assets and distribute progress or loss on recognition among partners using
profit and loss ratio.
a.any conflict between the selling set and carrying amount of the sold
assets shall be recorded in an account called gain or loss on realization.
b.the gain or loss on realization account shall be closed to the partners
ceiling accounts using profit and loss ratio.
3.if partners capital offset results in a debit entry balance ( unequal balance), the
followers may happen:
a.if a partner has a impart balance exercise the right of offset (apply the loan
balance against the debit balance).
b.if there is no loan or if capital balance still results in a debit balance:
b.1 if partner is solvent and a general partner deficient partnermakes
special cash investment to remove his capital deficiency.
b.
2 if partner is bankrupt and general partner or if limited partner
deficient partner is unable to pay; the remaining solvent partners will
take the deficiency.
4.cash is to be distributed in the following order of priority:
a.first, to outside partnership creditors.
b.second,to partners for loan accounts.
c.third, to partners for capital accounts.
note:the final diffusion of cash to partners is made based on the partners
capital balances and not based on the profit and loss ratio.
marivic valenzuela-manalo
3
5.when cash is not sufficient to pay creditors, the solvent general partners shall
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