FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 12: Accounting for Partnerships

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 51

Multiple Choice

Review LaterAdd Note

Review Later

A partner has a capital balance of $40,000 for five months,$50,000 for six months,and $60,000 for one month.The average capital balance is

A) $49,168
B) $50,000
C) $48,500
D) $46,667

E) A) and B)
F) B) and C)

Correct Answer

verified

Show Answer

Question 52

Multiple Choice

Review LaterAdd Note

Review Later

In a liquidation,the liabilities of the partnership should be paid

A) after a revaluation of assets
B) before any sales of assets
C) before the distribution of cash to partners
D) before the distribution of gains and losses on the disposal of assets

E) C) and D)
F) A) and D)

Correct Answer

verified

Show Answer

Question 53

True/False

Review LaterAdd Note

As long as the action is within the scope of the partnership,any partner can bind the partnership.

Delta and Chen form a partnership and invest the following assets and liabilities In the journal provided prepare the entry to record the formation of the partnership.(Omit explanation. )

The admission of a partner does not change the composition of partners' equity if the new partner purchases the old partner's interest by paying the old partner directly.

If the asset accounts did not reflect their current values,the asset accounts would need to be adjusted before admitting the new partner.

Rachel and Dillon divide partnership income and losses solely on the basis of their average capital balances.Rachel had $55,000 invested during all of 20x5;Dillon had $40,000 invested from January 1 to August 31,and he invested another $15,000 on September 1.If income was $160,000 during 20x5,how much should each partner receive?

Eddie and Lauren are partners in a business.Eddie's original capital contribution was $80,000,and Lauren's was $120,000.They agreed to share profits and losses as follows: Calculate each partner's share of profits and losses,assuming (a)the profit was $200,000, (b)the profit was $140,000,and (c)the loss was $16,000.

Partners' Withdrawals accounts have normal debit balances.

The ability of a partner to enter into a contract on behalf of all partners is called

A partner who withdraws from a partnership may not be entitled to the balance in his or her Capital account.

The salary allocation to partners also appears as Salaries Expense on the partnership income statement.

When salary and interest allocations exceed net income,a net loss has occurred.

After selling all the assets and paying the liabilities in a liquidation of a partnership,the partners share any remaining cash according to the stated ratios.

When a withdrawing partner withdraws assets less than his or her capital balance,the excess is treated as a bonus to the remaining partners.

Joan pays Eva $60,000 for her $40,000 interest in a partnership.The entry to record the sale on the partnership books is:

Briyanna and Greg form a partnership and invest the following assets and liabilities.Greg's building is subject to a $40,000 mortgage that is not assumed by the partnership. In the journal provided prepare the entry to record the formation of the partnership.(Omit explanation. )

Paul,Quinn,and Ralph have equities in a partnership of $120,000,$180,000,and $100,000,respectively,and share income and losses in a ratio of 2:1:2,respectively.The partners have agreed to admit Sandy to the partnership.Prepare entries in journal form without explanations to record the admission of Sandy to the partnership under each of the following assumptions: a.Sandy invests $100,000 for a 30 percent interest,and a bonus is recorded for Sandy. b.Sandy invests $150,000 for a one-fifth interest,and a bonus is recorded for the old partners.

The division of partnership profits on the basis of salaries,interest,and a stated ratio is usually necessary because

In a liquidation,one partner may have to make up the deficit in another partner's account.