The following statements are correct, except a)Admission of new partner by purchase has no effect in total capital of the firm b)Admission of new partner by investment increases the total capital of the firm c) Admission of new partner by investment using revaluation method affects the new partner capital d)Assignment of interest does not dissolve the business

The following statements are correct, except

a)Admission of new partner by purchase has no effect in total capital of the firm

b)Admission of new partner by investment increases the total capital of the firm

c) Admission of new partner by investment using revaluation method affects the new partner capital

d)Assignment of interest does not dissolve the business.

6)When Mill retired from the partnership of Mill, Yale, and Lear, the final settlement of Mill's interest exceeded Mill's capital balance. Under the bonus method, the excess

a)Was recorded as goodwill.

b)Was recorded as an expense.

c)Reduced the capital balances of Yale and Lear.

d. Had no effect on the capital balances of Yale and Lear.

7)If A is the total capital of the partnership before admission of a new partner, B is the total capital of the partnership after the investment of a new partner, C is the amount of the new partner’s investment, and D is the amount of capital credit to the new partner, then there is:

a)A bonus to the new partner if B = A + C and D < C.

b)A bonus to the old partner if B = A + C and D > C.

c)Both a and b are correct

d)Both a and b are incorrect.