FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 12: Partnerships

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 1

Multiple Choice

Review LaterAdd Note

Review Later

Floyd and Merriam start a partnership business on June 12,2019.Their capital account balances as of December 31,2020 stood as follows: They agreed to admit Ramelow into the business for a one-third interest in the new partnership.Ramelow contributes $24,000 cash in exchange for the partnership interest.Floyd and Merriam share profits and losses equally before the admission of Ramelow.What is the correct capital account balance of Ramelow after he enters the business? (Do not round intermediate calculations.Round the final answer to the nearest dollar. )

A) $24,000
B) $32,000
C) $28,000
D) $55,000

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

Correct Answer

verified

Show Answer

Question 2

True/False

Review LaterAdd Note

Review Later

Upon liquidation of a partnership,the cash received from the sale of assets is first returned to the capital balances of the partners.The remaining cash is then used to pay off the liabilities of the business.

A) True
B) False

Correct Answer

verified

Show Answer

Question 3

Multiple Choice

Review LaterAdd Note

Nancy and Betty enter into a partnership agreement where they decide to share profits according to the following rules: (a) Nancy and Betty will receive salaries of $1700 and $14,500 respectively as the first allocation. (b) The next allocation is based on 20% of each partner's capital balances. (c) Any remaining profit or loss is to be allocated completely to Betty. The partnership's net income for the first year is $50,000.Nancy's capital balance is $83,000 and Betty's capital balance is $11,000 at the end of the year.Calculate the share of profit/loss to be allocated to Betty.

Which of the following types of business organizations pay business income taxes?

Which of the following is an advantage of a limited liability company compared to a corporation?

Adam,Bill,and Charlie are partners.The profit and loss sharing rule between them is 4:6:1,with Bill receiving the largest share and Charlie receiving the smallest.The partnership incurs a net loss of $72,000.While closing the Income Summary ________.(Do not round any intermediate calculations. )

Farrell and Jimmy enter into a partnership agreement on May 1,2018.Farrell contributes $30,000 and Jimmy contributes $140,000 as their capital contributions.They decide to share profits and losses in the ratio of their respective capital account balances.The net income for the year ended December 31,2018 is $40,000.Which of the following amounts should be credited to Jimmy's capital account? (Do not round any intermediate calculations.Round your final answers to the nearest dollar. )

Nancy and Peter enter into a partnership and decide to share profits and losses as follows: 1.The first allocation is a salary allowance with Nancy receiving $13,000 and Peter receiving $11,000. 2) The second allocation is 15% of the partners' capital balances at year end.On December 31,2019,the capital balances for Nancy and Peter are $82,000 and $18,000,respectively. 3) Any remaining profit or loss is allocated equally. For the year ending December 31,2019,the partnership reported a net loss of $147,000.What is Peter's share of the net loss?

Capital deficiency refers to a partnership's claim against a partner.

In the process of liquidation,a partnership firm sells its non-cash assets with a book value of $55,000,for $73,000.Which of the following will be included in the entry to record the sale of assets at liquidation?

In a general partnership,if one partner cannot pay his or her part of the debts,the other partner or partners must pay with their personal assets.

Trevor and Brian enter into a partnership and decide to share profits and losses as follows: 1.The first allocation is a salary allowance with Trevor receiving $10,000 and Brian receiving $20,000. 2.The second allocation is 20% of the partners' capital balances at year end.On December 31,2019,the capital balances for Trevor and Brian are $50,000 and $40,000,respectively. 3.Any remaining profit or loss is allocated equally. For the year ending December 31,2019,the partnership reported net income of $50,000. Required: 1.Calculate the share of profit allocated to each partner. 2.Prepare the journal entry to record the allocation of profit on December 31,2019.

Floyd and Merriam start a partnership business on June 12,2019.Their capital account balances as of December 31,2020 stood as follows: They agreed to admit Ramelow into the business for a one-fifth interest in the new partnership.Ramelow contributes $27,000 cash in exchange for the partnership interest.Assume that Floyd and Merriam shared profits and losses in a 3:1 ratio before the admission of Ramelow.Which of the following is the correct journal entry to record the above admission?

Which of the following is an advantage of a partnership?

Which of the following is TRUE when a new partner is admitted to a partnership by purchasing an existing partner's interest?

In a limited liability partnership,each partner is not personally liable for the malpractice or negligence committed by another partner.

Which of the following is TRUE of the assets of a partnership?

In a partnership,when a partner contributes a particular asset to the firm,he or she is considered to be the sole owner of the asset.

The balance sheet of Ryan and Peter's partnership as of December 31,2018,is given below. Ryan and Peter share profits in the ratio 3:2.They liquidate the partnership.The furniture and equipment Sold at a loss of $50,000.The accounts receivable were collected in full and the other assets were written Off as worthless.The cash balance remaining to pay the liabilities is ________.

The balance sheet of Ryan and Peter's partnership as of December 31,2018,is given below. Ryan and Peter share profits in the ratio 3:2.They have decided to liquidate the partnership.The accounts payable were settled at $17,000 due to the poor financial condition of the partnership firm.As a result,Ryan's capital account will be credited by ________.