Question 1

Each partner is jointly and severally liable for only their portion of the partnership liabilities.

Accepted Answer

A) True 
 B)False

Question 2

At September 30, 2014, C. Saber and J. Wong, the two partners of City Landscaping, had capital account balances of $25,000 each. D. Walker joined the partnership on September 30, 2014 and received a 1/3 interest in the partnership in exchange for a capital contribution of $40,000.
For the year ended September 30, 2015, City Landscaping had profit of $126,000 which is allocated equally to the three partners. Withdrawals during the year were $18,000 each by Saber and Wong, and $14,000 by Walker.
Instructions
a. Record the transaction on September 30, 2014 admitting Walker into the partnership.
b. Calculate the balance of each partner's capital account after the transaction.
c. Prepare the Statement of Partners' Equity for the year ended September 20, 2015.

Accepted Answer

The answer of At September 30, 2014, C. Saber and...

Question 3

Partners A, B, and C have capital account balances of $60,000 each. The profit and loss ratio is 5:2:3 respectively. In the process of liquidating the partnership, noncash assets with a carrying amount of $50,000 are sold for $20,000. The balance of Partner B's Capital account after the sale is

Accepted Answer

A)  $45,000. 
B)  $51,000. 
C)  $54,000. 
D)  $66,000. 
A)  $45,000. 
B)  $51,000. 
C)  $54,000. 
D)  $66,000.

Question 4

When assets are rolled into a partnership, the value that they are allocated in the partnership is the same as the value in the previous entity.

Accepted Answer

A) True 
 B)False

Question 5

Sung and Ping have partnership capital account balances of $180,000 and $140,000 respectively and share profits and losses equally. Luing is admitted to the partnership by investing $80,000 for a one-fourth ownership interest. The balance of Ping's capital account after Luing is admitted is

Accepted Answer

A)  $150,000. 
B)  $130,000. 
C)  $160,000. 
D)  $175,000. 
A)  $150,000. 
B)  $130,000. 
C)  $160,000. 
D)  $175,000.

Question 6

The admission of a new partner may result in a bonus to the existing partners.

Accepted Answer

A) True 
 B)False

Question 7

Frodo and Merry share partnership profits and losses in the ratio of 6:4. Frodo's capital account balance is $80,000 and Merry's capital account balance is $50,000. Pippen is admitted to the partnership by investing $90,000 and is to receive a 25% ownership interest. Frodo, Merry, and Pippen's capital balances after Pippen's investment will be

Accepted Answer

The answer of Frodo and Merry share partnership profits and...

Question 8

When a partnership interest is purchased from an existing partner

Accepted Answer

A)  each partner's capital account is affected. 
B)  the transaction is a personal transaction between the purchaser and the selling partner(s). 
C)  the buyer receives equity equal to the amount of cash paid. 
D)  all partners will receive some part of the purchase price. 
A)  each partner's capital account is affected. 
B)  the transaction is a personal transaction between the purchaser and the selling partner(s). 
C)  the buyer receives equity equal to the amount of cash paid. 
D)  all partners will receive some part of the purchase price.

Question 9

Mutual agency means that each partner acts for the partnership when he or she does partnership business.

Accepted Answer

A) True 
 B)False

Question 10

Brewer and Tony have a partnership agreement which includes the following provisions regarding sharing profit or loss:
1. A salary allowance of $30,000 to Brewer and $15,000 to Tony.
2. An interest allowance of 10% on capital balances at the beginning of the year.
3. The remainder to be divided 30% to Brewer and 70% to Tony.
The capital balances on January 1, 2013, for Brewer and Tony were $80,000 and $100,000, respectively. During 2013, the Brewer and Tony Merchandising Partnership had sales of $330,000, cost of goods sold of $190,000, and operating expenses of $60,000.
Instructions
Prepare an income statement for the Brewer and Tony Merchandising Partnership for the year ended December 31, 2013. As a part of the income statement, include a Division of Profit to each of the partners.

Accepted Answer

The answer of Brewer and Tony have a partnership agreement...

Question 11

Which of the following statements is true regarding a partnership?

Accepted Answer

A)  A partnership is taxed as a separate entity. 
B)  Only professionals, such as doctors and lawyers may form a partnership. 
C)  A partnership must file an information return that reports the partnership profit and the partners' share in that profit. 
D)  A partner's income tax is based on the amount of money the partner withdrew from the partnership during the year. 
A)  A partnership is taxed as a separate entity. 
B)  Only professionals, such as doctors and lawyers may form a partnership. 
C)  A partnership must file an information return that reports the partnership profit and the partners' share in that profit. 
D)  A partner's income tax is based on the amount of money the partner withdrew from the partnership during the year.

Question 12

On January 1, 2013, the opening balances in the Ho-Hum partnership were Ho, $12,000 and Hum, $14,000. During the year, the partnership earned $80,000. Profit is split equally between the partners. Ho worked a significant amount during the year and withdrew $50,000. Hum was mainly a silent partner and withdrew only $10,000. At the end of the year, after all accounts have been closed, the balance in Hum's capital account was

Accepted Answer

A)  $19,000. 
B)  $44,000. 
C)  $54,000. 
D)  $4,000. 
A)  $19,000. 
B)  $44,000. 
C)  $54,000. 
D)  $4,000.

Question 13

A withdrawal of a partner may result in a payment from remaining partners personal assets.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following statements is true regarding the form of a legally binding partnership contract?

Accepted Answer

A)  The partnership contract must be in writing. 
B)  The partnership contract may be based on a handshake. 
C)  The partnership contract may be implied. 
D)  The partnership contract cannot be oral. 
A)  The partnership contract must be in writing. 
B)  The partnership contract may be based on a handshake. 
C)  The partnership contract may be implied. 
D)  The partnership contract cannot be oral.

Question 15

A partnership is a relationship between people who do business with the intention of making a profit.

Accepted Answer

A) True 
 B)False

Question 16

A corporation is subject to less government restrictions than a partnership.

Accepted Answer

A) True 
 B)False

Question 17

The Statement of Partners' Equity explains

Accepted Answer

A)  the amount of legal liability of each of the partners. 
B)  the types of assets invested in the business by each partner. 
C)  how the partnership will be capitalized if a new partner is admitted to the partnership. 
D)  the changes in each partner's capital account and in total partnership capital during a period. 
A)  the amount of legal liability of each of the partners. 
B)  the types of assets invested in the business by each partner. 
C)  how the partnership will be capitalized if a new partner is admitted to the partnership. 
D)  the changes in each partner's capital account and in total partnership capital during a period.

Question 18

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

Accepted Answer

A)  first to creditors and the remainder to partners. 
B)  to the partners on the basis of their capital balances. 
C)  to the partners on the basis of their profit-sharing ratio. 
D)  only after all creditors have been paid. 
A)  first to creditors and the remainder to partners. 
B)  to the partners on the basis of their capital balances. 
C)  to the partners on the basis of their profit-sharing ratio. 
D)  only after all creditors have been paid.

Question 19

A bonus to a departing partner maybe paid if there is unrecorded goodwill resulting from the partnership's superior earnings record.

Accepted Answer

A) True 
 B)False

Question 20

The liquidation of a partnership

Accepted Answer

A)  cannot be a voluntary act of the partners. 
B)  terminates the business. 
C)  eliminates those partners with a capital deficiency. 
D)  cannot occur unless all partners approve. 
A)  cannot be a voluntary act of the partners. 
B)  terminates the business. 
C)  eliminates those partners with a capital deficiency. 
D)  cannot occur unless all partners approve.

Each partner is jointly and severally liable for only their portion of the partnership liabilities.

Partners A, B, and C have capital account balances of $60,000 each. The profit and loss ratio is 5:2:3 respectively. In the process of liquidating the partnership, noncash assets with a carrying amount of $50,000 are sold for $20,000. The balance of Partner B's Capital account after the sale is

When assets are rolled into a partnership, the value that they are allocated in the partnership is the same as the value in the previous entity.

Sung and Ping have partnership capital account balances of $180,000 and $140,000 respectively and share profits and losses equally. Luing is admitted to the partnership by investing $80,000 for a one-fourth ownership interest. The balance of Ping's capital account after Luing is admitted is

The admission of a new partner may result in a bonus to the existing partners.

When a partnership interest is purchased from an existing partner

Mutual agency means that each partner acts for the partnership when he or she does partnership business.

Which of the following statements is true regarding a partnership?

A withdrawal of a partner may result in a payment from remaining partners personal assets.

Which of the following statements is true regarding the form of a legally binding partnership contract?

A partnership is a relationship between people who do business with the intention of making a profit.

A corporation is subject to less government restrictions than a partnership.

The Statement of Partners' Equity explains

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

A bonus to a departing partner maybe paid if there is unrecorded goodwill resulting from the partnership's superior earnings record.

The liquidation of a partnership

Accounting in Action

The Recording Process

Adjusting the Accounts

Completion of the Accounting Cycle

Accounting for Merchandising Operations

Inventory Costing

Internal Control and Cash

Long-Lived Assets

Current Liabilities

Accounting Principles

Introduction to Corporations

Corporations: Additional Topics and Ifrs

Non-Current Liabilities

The Cash Flow Statement

Financial Statement Analysis

Investments

Filters

Exam 12: Accounting for Partnerships

Each partner is jointly and severally liable for only their portion of the partnership liabilities.

Partners A, B, and C have capital account balances of $60,000 each. The profit and loss ratio is 5:2:3 respectively. In the process of liquidating the partnership, noncash assets with a carrying amount of $50,000 are sold for $20,000. The balance of Partner B's Capital account after the sale is

When assets are rolled into a partnership, the value that they are allocated in the partnership is the same as the value in the previous entity.

Sung and Ping have partnership capital account balances of $180,000 and $140,000 respectively and share profits and losses equally. Luing is admitted to the partnership by investing $80,000 for a one-fourth ownership interest. The balance of Ping's capital account after Luing is admitted is

The admission of a new partner may result in a bonus to the existing partners.

When a partnership interest is purchased from an existing partner

Mutual agency means that each partner acts for the partnership when he or she does partnership business.

Which of the following statements is true regarding a partnership?

A withdrawal of a partner may result in a payment from remaining partners personal assets.

Which of the following statements is true regarding the form of a legally binding partnership contract?

A partnership is a relationship between people who do business with the intention of making a profit.

A corporation is subject to less government restrictions than a partnership.

The Statement of Partners' Equity explains

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

A bonus to a departing partner maybe paid if there is unrecorded goodwill resulting from the partnership's superior earnings record.

The liquidation of a partnership

Accounting in Action

The Recording Process

Adjusting the Accounts

Completion of the Accounting Cycle

Accounting for Merchandising Operations

Inventory Costing

Internal Control and Cash

Long-Lived Assets

Current Liabilities

Accounting Principles

Introduction to Corporations

Corporations: Additional Topics and Ifrs

Non-Current Liabilities

The Cash Flow Statement

Financial Statement Analysis

Investments

Filters