Who gets the bonus under the bonus method

Assignment Help Financial Accounting

Reference no: EM132770087

Problem 1: When Mr. X is admitted to the partnership, the fair value of the assets he contributes exceeds his initial capital balance. If Mr. Z will retire soon from the partnership, what method of recording Mr. X's admission should Mr. Z prefer?

A. The bonus method

B. The revaluation method

C. Either the bonus or the revaluation method

D. Neither the bonus or the revaluation method

Problem 2: When Mr. B is admitted to the partnership, the fair values of the assets he contributed exceed his initial capital balance. In this case who gets the bonus under the bonus method?

A. Mr. B gets the bonus

B. The old partners get the bonus

C. Both Mr. B and the old partners get the bonus

D. Neither Mr. B nor the old partners get the bonus

Reference no: EM132770087

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