Exam 17: Partnership

Applying the interest allowance method,compute Julie and Jennifer's share of net income if Julie invested $50,000 and Jennifer invested $35,000 at an 10% interest rate,with the remainder to be divided equally.Net income was $10,000.

The business paid an account. Debit ________ Credit ________

The two types of allowances that may be considered before the division of profits and losses are:

Cory,Brooke,and Amy share profits and losses in a 2:1:1 ratio,respectively,in their partnership.The assets are to be reduced $10,000 in value when Brooke wishes to leave the partnership.If each partner had a capital balance of $30,000 before Brooke's notification of withdrawal,what amount should Brooke be allowed to withdraw from the partnership?

An interest allowance is based on the beginning capital balance of each partner.

Dows and Sands' partnership capital balances are $45,000 and $65,000,respectively.They share profits and losses in a 1:3 ratio for Dows and Sands,respectively.Davis is admitted to the partnership and invests $55,000 for a one-fourth interest,with a bonus to the old partners.Prepare the journal entry to admit Davis to the partnership.

James wants to invest cash so that he will have a one-third interest in Thomas and Stanley's company.The capital balances are $6,000 Thomas,$9,000 Stanley.The admission of James would be to:

When recording a bonus to a new partner,the new partner will:

A partner may withdraw from a partnership and take assets valued at more than book equity if:

The characteristic that means if a partnership is unable to pay its obligations all general partners are individually liable is known as:

After several years of business,Abel,Barney,and Cole are liquidating.The following are post-closing account balances. Cash 18,000 Inventory 73,000 Other assets 157,000 Accounts Payable 61,000 Abel, Capital 50,000 Barney, Capital 50,000 Cole, Capital 87,000 Non-cash assets are sold for $305,000.Profits and losses are shared equally. After all liabilities are paid,divide the remaining cash amongst the partners.

What is the closing entry to allocate net income of $54,000 to Sara,Ellen,and Mary? Respective capital balances are $50,000,$80,000,and $20,000.No agreement was made for division of income.

A partnership can be joined by:

When a partnership is liquidated,the journal entry to pay the claims of creditors would include:

Track and Smith are partners sharing profits and losses in a 3:2 ratio for Track and Smith,respectively.Their capital balances are $12,000 and $18,000,respectively.The partners agree to admit Don for $8,000 for a 30% interest in the partnership.Smith's capital balance after admitting Don is:

The partnership of Rick and Allan is being liquidated.All gains and losses are shared in a 3:5 ratio,respectively.Before liquidation,their balance sheet balances are as follows: Cash \ 10,000 Other Assets 8,000 Liabilities 4,000 Rick, Capital 7,000 Allan, Capital 7,000 If the Other Assets are sold for $9,000,how much will each partner receive upon liquidation?

An interest allowance is based on a partner's individual initial investment of capital.

Partner A invested furniture that was recorded at a value above the fair market value.This error would cause:

Bill pays Steve $12,000 for his $9,000 interest in a partnership.On the partnership books:

Tricia and Jennifer formed a partnership.Tricia invested $15,000 cash;Jennifer invested $8,000 cash,equipment with a fair value of $7,000,and $2,000 accounts payable.The proper entry to record this is: