The balance sheet of Elsa Laing, CPA (a single proprietorship) had total assets of $200,000, including unimpaired goodwill of $15,000 recognized when Laing had acquired the accounting practice of another sole practitioner, and total liabilities of $30,000. In Laing's negotiations with the partners of Burns & Damon LLP for the acquisition of her proprietorship by the limited liability partnership, she insists on a capital account balance of $190,000, pointing out her higher-than-typical earnings over the past five years. Partners Ralph Burns and Linda Damon maintain that the current fair value of Laing's proprietorship identifiable net assets is $155,000 (their carrying amount); they offer to admit Laing to Burns, Damon & Laing LLP for a capital account balance of $175,000.
Do you support the position of Elsa Laing or of Ralph Burns and Linda Damon? Explain.

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The Answer of The balance sheet of Elsa Laing, CPA (a single proprietorship) had total assets of $200,000, including unimpaired goodwill of $15,000 recognized when Laing had acquired the accounting practice of another sole practitioner, and total liabilities of $30,000. In Laing's negotiations with the partners of Burns & Damon LLP for the acquisition of her proprietorship by the limited liability partnership, she insists on a capital account balance of $190,000, pointing out her higher-than-typical earnings over the past five years. Partners Ralph Burns and Linda Damon maintain that the current fair value of Laing's proprietorship identifiable net assets is $155,000 (their carrying amount); they offer to admit Laing to Burns, Damon & Laing LLP for a capital account balance of $175,000.
Do you support the position of Elsa Laing or of Ralph Burns and Linda Damon? Explain.

The Balance Sheet of Elsa Laing, CPA (A Single Proprietorship)