Exam 12: Accounting for Partnerships

Partners Acer and Barr have capital balances in a partnership of $40,000 and $60,000, respectively. They agree to share profits and losses as follows: If income for the year was $30,000, what will be the distribution of income to Acer?

Sam is investing in a partnership with Jerry. Sam contributes equipment that originally cost $63,000, has a book value of $30,000, and a fair market value of $39,000. The entry that the partnership makes to record Sam's initial contribution includes a

Donna Leeds and Ann Reeves have capital accounts of $480,000 and $420,000, respectively. Jeff Evans and Pete Patton are to join the partnership. Evans invests $450,000 in the partnership for which he receives a capital credit of $450,000. Patton purchases a one-half interest from Leeds for $300,000 and a one-fourth interest from Reeves for $90,000. Instructions (a) Prepare the journal entries to record the admission of Evans and Patton to the partnership. (b) Determine the capital balances of the partners after the admission of Evans and Patton.

Which of the following is not a principal characteristic of the partnership form of business organization?

A new partner may be admitted to the partnership by ______________ the interest of an existing partner, or by ______________ assets in the partnership.

The Polen-James partnership is terminated when creditor claims exceed partnership assets by $40,000. James is a millionaire and Polen has no personal assets. Polen's partnership interest is 75% and James's is 25%. Creditors

The total column of the Partners' Capital Statement for Orson Company is as follows: The partnership has three partners. The first two partners have ending capital balances that are equal. The ending balance of the third partner is half of the ending balance of the first partner. What is the ending capital balance of the third partner?

A partnership

Partners Acer and Barr have capital balances in a partnership of $40,000 and $60,000, respectively. They agree to share profits and losses as follows: If net loss for the year was $2,000, what will be the distribution to Barr?

In liquidation, balances prior to the distribution of cash to the partners are: Cash $300,000; Presley, Capital $140,000; Laswell, Capital $130,000, and Hunter, Capital $30,000. The income ratio is 6:2:2, respectively. How much cash should be distributed to Presley?

Arlene, Brad, and Chick are partners, sharing income 2:1:2. After selling all of the assets for cash, dividing gains and losses on realization, and paying liabilities, the balances in the capital accounts are as follows: Arlene, $10,000 Cr; Brad, $10,000 Cr; and Chick, $30,000 Cr. How much cash should be distributed to Arlene?

A ______________ allowance or ______________ on partners' capital accounts are not expenses of the partnership when they are specified as the basis for sharing income and losses.

A partners' capital statement explains

The HK Partnership is liquidated when the ledger shows: Howell and Kenton's income ratios are 3:2, respectively. Instructions Prepare a schedule of cash payments, assuming that the noncash assets were sold for $70,000. Assume that any partner's capital deficiencies cannot be paid to the partnership.

Prepare a partners' capital statement for Zimmermann Company based on the following information. Net income was $35,000, and the partners share income 60% to Zimmer and 40% to Mann.

In the final step of the liquidation process, remaining cash is distributed to partners

The partnership of Lane and Starr reports net income of $60,000. The partners share equally in income and losses. The entry to record the partners' share of net income will include a

On December 31, Thompson Company has cash $30,000, noncash assets $150,000, and liabilities $80,000. Capital balances were Stine $55,000 and Pine $45,000. The firm is liquidated, and the noncash assets are sold for $125,000. Stine and Pine share income in a 60:40 ratio. Instructions Prepare entries to record (a) the sale of noncash assets and (b) the allocation of the gain (loss) on liquidation to the partners.

Partnership creditors may have a claim on the personal assets of any of the partners if the partnership assets are not sufficient to settle claims.

Finney is admitted to a partnership with a 25% capital interest by a cash investment of $90,000. If total capital of the partnership is $390,000 before admitting Finney, the bonus to Finney is