Question 1

What was the balance in Young's Capital account at the end of the second year?

Accepted Answer

A)  $133,380. 
B)  $ 84,760. 
C)  $105,690. 
D)  $132,860. 
E)  $ 71,760. 
A)  $133,380. 
B)  $ 84,760. 
C)  $105,690. 
D)  $132,860. 
E)  $ 71,760.

Question 2

Jerry, a partner in the JSK partnership, begins the year on January 1, 2018 with a capital balance of $20,000.The JSK partnership agreement states that Jerry receives 6% interest on his monthly weighted average capital balance without regard to normal drawings.Each partner draws $5,000 in cash from the business every quarter.Any withdrawal in excess of that will be accounted for as a direct reduction of the partner's capital balance. -On March 1, 2018, when the partnership tax return for 2017 was completed, Jerry's capital
Account was credited for his share of 2017 profit of $120,000.
-Jerry withdrew $5,000 quarterly, beginning March 31st.
-On September 1, Jerry's capital account was credited with a special bonus of $60,000 for
Business he brought to the partnership.
What amount of interest will be attributed to Jerry for the year 2018 that will go toward his profit distribution for the year?

Accepted Answer

A)  $6,000. 
B)  $6,250. 
C)  $7,950. 
D)  $8,400. 
E)  None of these answer choices is correct. 
A)  $6,000. 
B)  $6,250. 
C)  $7,950. 
D)  $8,400. 
E)  None of these answer choices is correct.

Question 3

Which of the following is not a characteristic of a partnership?

Accepted Answer

A)  The partnership itself pays no income taxes. 
B)  It is easy to form a partnership. 
C)  Any partner can be held personally liable for all debts of the business. 
D)  A partnership requires written Articles of Partnership. 
E)  Each partner has the power to obligate the partnership for liabilities. 
A)  The partnership itself pays no income taxes. 
B)  It is easy to form a partnership. 
C)  Any partner can be held personally liable for all debts of the business. 
D)  A partnership requires written Articles of Partnership. 
E)  Each partner has the power to obligate the partnership for liabilities.

Question 4

Withdrawals from the partnership capital accounts are typically not used

Accepted Answer

A)  To reward partners for work performed in the business. 
B)  To reduce the partners' capital account balances at the end of an accounting period. 
C)  To record interest earned on a partner's capital balance. 
D)  To reduce the basic investment that has been made in the business. 
E)  To record the partnership's payment of a partner's personal expense such as income tax. 
A)  To reward partners for work performed in the business. 
B)  To reduce the partners' capital account balances at the end of an accounting period. 
C)  To record interest earned on a partner's capital balance. 
D)  To reduce the basic investment that has been made in the business. 
E)  To record the partnership's payment of a partner's personal expense such as income tax.

Question 5

Roberts retires and is paid $160,000 based on an independent appraisal of the business.If the goodwill method is used, what is the capital balance of Dana?

Accepted Answer

A)  $ 20,000. 
B)  $ 60,000. 
C)  $110,000. 
D)  $120,000. 
E)  $230,000. 
A)  $ 20,000. 
B)  $ 60,000. 
C)  $110,000. 
D)  $120,000. 
E)  $230,000.

Question 6

If C contributes $40,000 to the partnership and the goodwill method is used, what amount will be debited for goodwill?

Accepted Answer

A)  $15,000 
B)  $20,000 
C)  $25,000 
D)  $28,000 
E)  $60,000 
A)  $15,000 
B)  $20,000 
C)  $25,000 
D)  $28,000 
E)  $60,000

Question 7

What was the balance in Eaton's Capital account at the end of the second year?

Accepted Answer

A)  $133,380. 
B)  $ 84,760. 
C)  $105,690. 
D)  $132,860. 
E)  $ 71,760. 
A)  $133,380. 
B)  $ 84,760. 
C)  $105,690. 
D)  $132,860. 
E)  $ 71,760.

Question 8

What was Nolan's total share of net income for 2018?

Accepted Answer

A)  $34,420. 
B)  $75,540. 
C)  $65,540. 
D)  $70,040. 
E)  $61,420. 
A)  $34,420. 
B)  $75,540. 
C)  $65,540. 
D)  $70,040. 
E)  $61,420.

Question 9

What was the balance in Thurman's Capital account at the end of the second year?

Accepted Answer

A)  $133,380. 
B)  $ 84,760. 
C)  $105,690. 
D)  $132,860. 
E)  $ 71,760. 
A)  $133,380. 
B)  $ 84,760. 
C)  $105,690. 
D)  $132,860. 
E)  $ 71,760.

Question 10

Which of the following type of organization is classified as a partnership, or similar to a partnership, for tax purposes? (I.) Limited Liability Company
(II.) Limited Liability Partnership
(III.) Subchapter S Corporation

Accepted Answer

A)  II only. 
B)  II and III. 
C)  I and II. 
D)  I and III. 
E)  I, II, and III. 
A)  II only. 
B)  II and III. 
C)  I and II. 
D)  I and III. 
E)  I, II, and III.

Question 11

The appropriate format of the December 31, 2017 closing entry for John & Hope Limited Liability Partnership, whose two partners had withdrawn their salaries from the partnership during the year, is:

Accepted Answer

The answer of The appropriate format of the December 31,...

Question 12

What was the total capital balance for the partnership at December 31, 2017?

Accepted Answer

A)  $600,000. 
B)  $564,000. 
C)  $535,000. 
D)  $523,000. 
E)  $545,000. 
A)  $600,000. 
B)  $564,000. 
C)  $535,000. 
D)  $523,000. 
E)  $545,000.

Question 13

What was Thurman's total share of net loss for the first year?

Accepted Answer

A)  $ 3,900 loss. 
B)  $11,700 loss. 
C)  $10,400 loss. 
D)  $24,700 loss. 
E)  $ 9,100 loss. 
A)  $ 3,900 loss. 
B)  $11,700 loss. 
C)  $10,400 loss. 
D)  $24,700 loss. 
E)  $ 9,100 loss.

Question 14

Record the journal entry to record the remainder of net income to the capital accounts.

Accepted Answer

The answer of Record the journal entry to record the...

Question 15

Why are the terms of the Articles of Partnership important to partners?

Accepted Answer

The Articles of Partnership contain term

Question 16

What was Wasser's capital balance at the end of 2018?

Accepted Answer

A)  $201,000. 
B)  $263,520. 
C)  $264,540. 
D)  $304,040. 
E)  $313,780. 
A)  $201,000. 
B)  $263,520. 
C)  $264,540. 
D)  $304,040. 
E)  $313,780.

Question 17

What was the amount of interest attributed to Wasser in the income distribution for 2018?

Accepted Answer

A)  $17,600. 
B)  $18,800. 
C)  $20,100. 
D)  $17,800. 
E)  $30,100. 
A)  $17,600. 
B)  $18,800. 
C)  $20,100. 
D)  $17,800. 
E)  $30,100.

Question 18

The partnership of Clapton, Seidel, and Thomas is insolvent and will be unable to pay $30,000 in liabilities that are currently due.What recourse is available to the partnership's creditors?

Accepted Answer

A)  They must present equal claims to the three partners as individuals. 
B)  They must try to obtain payment from the partner with the largest capital account balance. 
C)  They cannot seek remuneration from the partners as individuals. 
D)  They may seek remuneration from any partner they choose. 
E)  They must present their claims to the three partners in descending order based on the partners' capital account balances. 
A)  They must present equal claims to the three partners as individuals. 
B)  They must try to obtain payment from the partner with the largest capital account balance. 
C)  They cannot seek remuneration from the partners as individuals. 
D)  They may seek remuneration from any partner they choose. 
E)  They must present their claims to the three partners in descending order based on the partners' capital account balances.

Question 19

What was Cleary's total share of net income for 2018?

Accepted Answer

A)  $34,420. 
B)  $75,540. 
C)  $65,540. 
D)  $70,040. 
E)  $61,420. 
A)  $34,420. 
B)  $75,540. 
C)  $65,540. 
D)  $70,040. 
E)  $61,420.

Question 20

Which of the following statements is correct regarding the admission of a new partner?

Accepted Answer

A)  A new partner must purchase a partnership interest directly from the business. 
B)  The right of co-ownership in the business property can be transferred to a new partner without the consent of other existing partners. 
C)  The right to participate in management of the business cannot be conveyed without the consent of other existing partners. 
D)  The right to share in profits and losses can be sold to a new partner without the consent of other existing partners. 
E)  A new partner always pays book value. 
A)  A new partner must purchase a partnership interest directly from the business. 
B)  The right of co-ownership in the business property can be transferred to a new partner without the consent of other existing partners. 
C)  The right to participate in management of the business cannot be conveyed without the consent of other existing partners. 
D)  The right to share in profits and losses can be sold to a new partner without the consent of other existing partners. 
E)  A new partner always pays book value.

Exam 14: Partnerships: Formation and Operation

What was the balance in Young's Capital account at the end of the second year?

Which of the following is not a characteristic of a partnership?

Withdrawals from the partnership capital accounts are typically not used

Roberts retires and is paid $160,000 based on an independent appraisal of the business.If the goodwill method is used, what is the capital balance of Dana?

If C contributes $40,000 to the partnership and the goodwill method is used, what amount will be debited for goodwill?

What was the balance in Eaton's Capital account at the end of the second year?

What was Nolan's total share of net income for 2018?

What was the balance in Thurman's Capital account at the end of the second year?

Which of the following type of organization is classified as a partnership, or similar to a partnership, for tax purposes? (I.) Limited Liability Company (II.) Limited Liability Partnership (III.) Subchapter S Corporation

The appropriate format of the December 31, 2017 closing entry for John & Hope Limited Liability Partnership, whose two partners had withdrawn their salaries from the partnership during the year, is:

What was the total capital balance for the partnership at December 31, 2017?

What was Thurman's total share of net loss for the first year?

Record the journal entry to record the remainder of net income to the capital accounts.

Why are the terms of the Articles of Partnership important to partners?

What was Wasser's capital balance at the end of 2018?

What was the amount of interest attributed to Wasser in the income distribution for 2018?

The partnership of Clapton, Seidel, and Thomas is insolvent and will be unable to pay $30,000 in liabilities that are currently due.What recourse is available to the partnership's creditors?

What was Cleary's total share of net income for 2018?

Which of the following statements is correct regarding the admission of a new partner?

The Equity Method of Accounting for Investments

A: the Equity Method of Accounting for Investments

Consolidation of Financial Information

A: Consolidation of Financial Information

Consolidations - Subsequent to the Date of Acquisition

A: Consolidations - Subsequent to the Date of Acquisition

Consolidated Financial Statements and Outside Ownership

A: Consolidated Financial Statements and Outside Ownership

Consolidated Financial Statements Intra-Entity Asset Transactions

A: Consolidated Financial Statements Intra-Entity Asset Transactions

Variable Interest Entities, Intra-Entity Debt, Consolidated Cash Flows, and Other Issues

A: Variable Interest Entities, Intra-Entity Debt, Consolidated Cash Flows, and Other Issues

Consolidated Financial Statements - Ownership Patterns and Income Taxes

A: Consolidated Financial Statements - Ownership Patterns and Income Taxes

Segment and Interim Reporting

A: Segment and Interim Reporting

Foreign Currency Transactions and Hedging Foreign Exchange Risk

A: Foreign Currency Transactions and Hedging Foreign Exchange Risk

Translation of Foreign Currency Financial Statements

A: Translation of Foreign Currency Financial Statements

Worldwide Accounting Diversity and International Accounting Standards

A: Worldwide Accounting Diversity and International Accounting Standards

Financial Reporting and the Securities and Exchange Commission

A: Financial Reporting and the Securities and Exchange Commission

Accounting for Legal Reorganizations and Liquidations

A: Accounting for Legal Reorganizations and Liquidations

A: Partnerships: Formation and Operation

Partnerships: Termination and Liquidation

A: Partnerships: Termination and Liquidation

Accounting for State and Local Governments, Part I

A: Accounting for State and Local Governments, Part I

Accounting for State and Local Governments, Part II

A: Accounting for State and Local Governments, Part II

Accounting for Not-For-Profit Entities

A: Accounting for Not-For-Profit Entities

Accounting for Estates and Trusts

A: Accounting for Estates and Trusts

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