1. When a partnership purchases interest of a retiring partner at more than book value, there must be:

1. Bonus to remaining partners
2. Bonus to remaining partners/negative asset revaluation
3. Bonus to retiring partners
4. Bonus to the retiring partner/positive asset revaluation

2. When the investment of a new partner is below the new partners' capital balance and goodwill is not recorded, who will receive the bonus?

1. The new partner
2. The old partners in their new profit or loss ratio
3. The old partners in their old profit or loss ratio
4. Old and new partner in their new profit or loss ratio

3. S1: The dissolution of a partnership occurs only when the partnership is terminating operations and going out of business. S2: Bonus paid to a new partner results in a reduction to the capital accounts of the existing partners in proportion to their capital ratio.

1. S1 is false; S2 is true
2. S1 is true; S2 is false
3. Both statements are false
4. Both statements are true