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Essay Details:
Essay text:
Baaz would be interested in fair evaluation of operating
performance and net assets, and in ensuring that the entity remains viable, since he is not entitled to a payout
for five years.
Issues
The partnership has new/questionable policies for
1. Allowance for doubtful accounts: percentage of sales versus specific identification
2. Write-off of obsolete inventory
3. Amortization policy for new computer equipment
Analysis
1. Allowance for doubtful accounts
An allowance for doubtful accounts must be established, but several approaches to establishing the
appropriate amount are allowed under GAAP...
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