Exam 17: Partnership

Applying the profit and loss ratio method,compute Taylor and Timmy's share of net income if Taylor invested $200,000 and Timmy invested $800,000 and the profit and loss ratio is 3:2.Net income was $75,000.

John and Brad have average capital balances of $25,000 and $10,000,respectively.The partners have agreed to allow $20,000 salary allowances.The partners will share income and losses in a 1:2 ratio.How much will each partner's capital account change if net income is $70,000?

Bernstein is brought into the partnership.His capital is equal to his net that he brings to the partnership.He brings assets of $167,000 and liabilities of $27,000.His capital balance will be:

Applying the ratio based on investment method,compute Taylor and Timmy's share of net income if Taylor invested $200,000 and Timmy invested $800,000.Net income was $75,000.

If the retiring partner's interest is sold to one of the remaining partners,the retiring partner's equity is merely transferred to the other partner.

Partners Roger and Martin each have $3,000 capital balances and share income and losses in a 2:1 ratio,respectively.Cash equals $1,000,noncash assets total $10,000,and liabilities are $5,000.If all the noncash assets are sold for $7,000,Martin's capital account will:

Given the following accounts: [1] Cash [2] Accounts receivable [3] Allowance for doubtful accounts [4] Merchandise inventory [5] Store supplies [6] Store equipment [7] Accumulated depreciation [8] Notes payable [9] Accounts payable [10] Able Partner's Capital [11] Baker Partner's Capital [12] Able Partner's withdrawals [13] Baker Partner's withdrawals [14] Income summary [15] Service revenue [16] Gain on realization [17] Loss on realization Indicate the account(s) to be debited and credited to record the following transactions. -Able partner withdrew cash from the business. Debit ________ & ________ & ________ Credit ________ & ________ & ________

All assets held by a partnership are:

The first entry to liquidate a partnership would probably include:

A new partner was admitted but the assets weren't revalued.A revaluation would have decreased the worth.This error would cause:

Track and Smith are partners sharing profits and losses in a 3:2 ratio.Their capital balances are $10,000 and $20,000,respectively.The partners agree to admit Don for $10,000 for a 30% interest in the partnership.Smith's capital balance after admitting Don is:

A statement of partner's equity is the same as a statement of owner's equity except for:

Partners Brian,Josh,and Chad have capital balances of $7,000,$3,000,and $90,000,respectively.The losses for the year are $12,000.What will Josh's capital balance be if the three partners share profits and losses at a 2:2:6 ratio?

Nathan invests $2,000 for 10% interest in a partnership that has total capital of $15,000 after admitting Nathan.Which of the following is true?

The Brad and Marcia partnership agree to admit Fred with a one-third interest for $5,000.Brad and Marcia's capital balances are $3,000,and $7,000,respectively,and they share profits and losses equally.The entry to admit Brad would include:

A bonus is paid to the old partners when:

A partnership admits a new partner.The new partner invests $50,000 in the business and receives a credit of $60,000 to his capital account.The difference of $10,000 is called a(n):

Partners are required to report their share of earnings on their personal tax return.

Given the following accounts: [1] Cash [2] Accounts receivable [3] Allowance for doubtful accounts [4] Merchandise inventory [5] Store supplies [6] Store equipment [7] Accumulated depreciation [8] Notes payable [9] Accounts payable [10] Able Partner's Capital [11] Baker Partner's Capital [12] Able Partner's withdrawals [13] Baker Partner's withdrawals [14] Income summary [15] Service revenue [16] Gain on realization [17] Loss on realization Indicate the account(s) to be debited and credited to record the following transactions. -The business bought store equipment on account. Debit ________ & ________ & ________ Credit ________ & ________ & ________

When two proprietors decide to combine their businesses and form a partnership,GAAP usually requires that non-cash assets be taken over at their: