Exam 12: Accounting for Partnerships

The partnership of Bher and Dhillips reports net income of $120000. The partners share equally in income and losses. The entry to record the partners' share of net income will include a

A partners' capital statement explains

Julie contributes as part of her initial investment accounts receivable with an allowance for doubtful accounts. Which of the following reflects a proper treatment?

The HK Partnership is liquidated when the ledger shows: Cash \ 60,000 Noncash Assets 90,000 Liabilities 44,000 Howell, Capital 100,000 Kenton, Capital 6,000 Henson and Kaenzig income ratios are 3:2 respectively. Instructions Prepare a schedule of cash payments assuming that the noncash assets were sold for $65000. Assume that any partner's capital deficiencies cannot be paid to the partnership.

Able Baker and Carter have partnership capital account balances of $600000 each. Income and losses are shared equally. Carter agrees to sell three-fourths of his ownership interest to Able for $525000 and one-fourth to Baker for $187500. Able and Baker will use personal assets to purchase Carter's interest. The partnership's entry to record Carter's withdrawal from the partnership would be a. Carter, Capital 712,500 Cash 712,500 b. Carter, Capital 712,500 Able, Capital 350,000 Baker, Capital 125,000 c. Carter, Capital 600,000 Able, Capital 450,000 Baker, Capital 150,000 d. Able, Capital 534,375 Baker, Capital 178,125 Carter, Capital 712,500

The partners' income and loss sharing ratio is 2:3:5 respectively. If the CHENARD JENNINGS and BLAIR Partnership is liquidated and the noncash assets are worthless the creditors will look to what partner's personal assets for settlement of the creditors' claims?

A major advantage of the partnership form of organization is that the partners have unlimited liability.

Which one of the following would not be considered an expense of a partnership in determining income for the period?

When a partnership interest is purchased

The Mayer and Rodin partnership agreement stipulates that profits and losses will be shared equally after salary allowances of $400000 for Mayer and $200000 for Rodin. At the beginning of the year Mayer's Capital account had a balance of $800000 while Rodin's ' Capital account had a balance of $700000. Net income for the year was $500000. The balance of Rodin's Capital account at the end of the year after closing is

The personal assets liabilities and personal transactions of partners are excluded from the accounting records of the partnership.

Which of the following is not an advantage of the partnership form of business?

In the liquidation of a partnership any gain or loss on the realization of noncash assets should be allocated

In the liquidation process if a capital account shows a deficiency

Use the following account balance information for Granobfin Partnership with income ratios of 2:4:4 for Granger Noble and Finn respectively. - Assume that as part of liquidation proceedings Granobfin sells its noncash assets for $510000. The amount of cash that would ultimately be distributed to Finn would be

A partnership

The basis for dividing partnership net income or net loss is referred to as any of the following except the

The net income of the Crowe and Browning partnership is $450000. The partnership agreement specifies that Crowe and Browning have a salary allowance of $120000 and $180000 respectively. The partnership agreement also specifies an interest allowance of 10% on capital balances at the beginning of the year. Each partner had a beginning capital balance of $300000. Any remaining net income or net loss is shared equally. What is the balance of Browning's Capital account at the end of the year after net income has been distributed?

The liquidation of a partnership means that a new partner has been admitted to the partnership.

Gable and Devito share partnership profits and losses in the ratio of 6:4. Gable's Capital account balance is $160000 and Devito's Capital account balance is $100000. Nance is admitted to the partnership by investing $180000 and is to receive a one-fourth ownership interest. Gable Devito and Nance's capital balances after Nance's investment will be Gable Devito Nance A) \ 160,000 \ 100,000 \ 180,000 B) \ 202,000 \ 128,000 \ 110,000 C) \ 198,000 \ 132,000 \ 110,000 D) \ 195,000 \ 135,000 \ 110,000