Reference no: EM132796726
Problem 1: Which of the following will describe the effect of admission of a new partner through purchase of interest (at book value) of existing partner?
a. Total Assets - No effect; Total Capital - Increase; Old Partners' P&L ratio - Decrease
b. Total Assets - No effect; Total Capital - No effect; Old Partners' P&L ratio - Decrease
c. Total Assets - Increase; Total Capital - Decrease; Old Partners' P&L ratio - Increase
d. Total Assets - Decrease; Total Capital - No effect; Old Partners' P&L ratio - No effect
Problem 2: Which of the following best describes the admission of a new partner by investing an amount equal to the agreed capital?
a. Total Assets - Increase; Total Capital - No effect; Old Partners' P&L ratio - No effect
b. Total Assets - No effect; Total Capital - Increase; Old Partners' P&L ratio - Decrease
c. Total Assets - Decrease; Total Capital - No effect; Old Partners' P&L ratio - No effect
d. Total Assets - Increase; Total Capital - Increase; Old Partners' P&L ratio - Decrease
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