Which of the following statements is correct with respect to a limited partnership?

Business

1 answer:

Viefleur [7K]2 years ago

5 0

Answer: option D

Explanation: A Limited liability partnership is an ownership style which exhibits characteristics of both partnership and corporations. This was implemented for the benefit of business entities and for the ease of owners.

a. In a limited liability a limited partner will never be personally liable for the debts.

b. A general partner can be a limited partner as long as there are two legal partners.

c. A general partner cannot be a secured creditor as he will always have unlimited liability.

d. A Limited liability partnership is the form of partnership in which some or all of the partners have limited liability.

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Answer:

Lonnie Holdiman Co.

A Schedule showing the determination of the corrected income before taxes for 2020 and 2021:

2020 2021

Before-tax income $101,000 $77,400

1. Excess Sales revenue (38,200) 38,200

2. December 31, 2020 Inventory understated 8,640 (8,640)

3. Amortized bonds discount not expensed (1,776) (1,901)

4. Equipment repairs not expensed (8,500) (9,400)

5. Overstated depreciation from capitalized

Equipment repairs 850 940

Corrected income before taxes $62,014 $96,599

Explanation:

a) Data and Calculations:

Before-tax income for 2020 = $101,000

Before-tax income for 2021 = $77,400

1. 2020 Sales Revenue $38,200; 2021 Sales Revenue $38,200

2. 2020 Understated inventory $8,640; 2021 Understated inventory $8,640

3. 2020 Unstated bonds interest expense $1,776

2021 Unstated bonds interest expense $1,901

4. 2020 Unstated equipment repairs $8,500 Overstated Equipment account $8,500

2021 Unstated equipment repairs $9,400 Overstated Equipment account $9,400

2020 Overstated Depreciation expense $850

2021 Overstated Depreciation expense $940.

Bonds Calculations:

Bonds outstanding value:

Bond's face value = $250,000

Discount = 15,000

Proceeds from bonds = $235,000