Problems due to piecemeal realizations-partnership, Financial Accounting

Problems due to Piecemeal realizations

These interim distributions give rise to two problems:

  • Partners have not always contributed capitals in the same ratio as that in which they share profits;
  • There will always be uncertainty of future realizations

 

These two problems point in the same direction:  how does one pa cash to partners in such amounts that the partner will never be asked to return any at a later date as excess?

The distribution has to be made in such a way each partner only receives cash after considering all possible gains and losses attributable to that partner at that stage.  Two methods have been developed to accomplish this;The

  • maximum possible loss method
  • The surplus capital method
Posted Date: 12/11/2012 6:57:24 AM | Location : United States







Related Discussions:- Problems due to piecemeal realizations-partnership, Assignment Help, Ask Question on Problems due to piecemeal realizations-partnership, Get Answer, Expert's Help, Problems due to piecemeal realizations-partnership Discussions

Write discussion on Problems due to piecemeal realizations-partnership
Your posts are moderated
Related Questions
FOREING BRANCHES The head office my set up a branch in a foreign  country. IAS 21 requires that the results of that  foreign branch to be translated into the local currency for t

Tony is a salesperson at a local auto showroom. He asks you to assist him in developing a tool for calculating purchase and lease payments. He has already developed a draft of the

Q. Given the following data, what is net income?  (Note: Not all items shown below will be included in income.) Cost of Goods Sold 8 Accoun

What is the best way of doing reconciliations of control accounts like Purchases Ledger Control vs Purchases Ledger and Sales Ledger Control vs Sales Ledger

John Chan considers buying a six-month stock futures contract on the shares of Li & Fung Limited. Shares of Li & Fung Limited are now trading at $50 per share and it is expected th

a company is evaluating a project requiring capital expenditure of 620,000. estimated life of project is four years and no salvage value. estimated net income and net cash flow fro

On November 1, 2011, Leetch Ltd. borrows $400,000 cash from a bank by signing a five-year installment note bearing 8% interest. The note needs equal total payments every year on Oc

Inventory control implies a planned approach of ascertaining while to buy, how much to buy and how much to stock hence costs including storing and buying are optimally minimum, wit

accountability through conceptual framework in australia eassy on this topic with research

Q. What is Depreciation Reserve Fund ? Depreciation Reserve Fund is the fund specially reserved for replacement of assets. Once the assets are purchased from the capital money