Exam 17: Partnership

When a partnership is worth more than the amounts recorded,an incoming partner may:

In comparison with the proprietorship form of business organization,forming a partnership offers which of the following advantages?

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 paid an account. Debit ________ & ________ & ________ Credit ________ & ________ & ________

Allison and Josh are partners in a business.Allison's capital is $60,000 and Josh's capital is $100,000.Profits for the year are $80,000.They agree to share profits and losses as follows: Allison Josh Salaries \ 20,000 \ 40,000 Interest on capital 10\% 10\% Remaining profits and losses 3/5 2/5 Allison's share of the profits before paying salaries and interest on capital is:

What is the closing entry to allocate net income $24,000 to Eric,Von,and Derek? Their respective capital balances are $20,000,$40,000,and $60,000.Net income is shared in a ratio of their capital balances.

Prepare the journal entry to record the partners' investment in the company. Palmer invests $1,000 cash and equipment on his books at $6,500 with accumulated depreciation of $1,500.The fair market value of the equipment is $7,000.Evans is investing $7,000 cash and $700 accounts payable.

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 provided services on credit. Debit ________ & ________ & ________ Credit ________ & ________ & ________

The accounting procedures are the same for sole proprietorships as for partnerships with the exception of:

When recording a bonus to a new partner,the new partner will:

Sue and Jill,who have ending capital balances of $80,000 and $60,000 respectively,agree to admit two new partners.Carlos will buy 1/4 of Sue's interest for $20,000 and 1/3 of Jill's interest for $25,000 directly from the partners.Carmen will invest $30,000 for a $30,000 equity interest.Journalize the entry to admit Carlos and Carmen.

Using its book value,Partner C invested equipment which had been valued over the past year using straight-line when declining balance was appropriate.This error would cause:

When the entity of a partnership is worth more than amounts recorded in the accounting records,an incoming partner may have to pay a bonus.

Mindy and Heather are partners who have agreed to allow Carol to purchase Heather's share for a direct payment of $20,000 to Heather.Mindy and Heather's previous capital balances were $8,000 and $12,000,respectively.What will be the amount in Carol's capital account?

Jane invests $8,000 for a one-fourth interest in a partnership in which the other partners have capital totaling $16,000 before admitting Jane.After distribution of the bonus,Jane's capital is:

Laura's investment in a new partnership includes $1,000 cash and $5,000 equipment.The new partnership is assuming $500 of Laura's accounts payable.The partnership entry should be to:

When the obligations of a partnership cannot be met,each partner is liable for the obligation.This characteristic is called:

Partners Ron and Sandra have $3,000 capital balances and share income and losses in a 2:1 ratio,respectively.Cash equals $1,000,noncash assets are $10,000,and liabilities are $5,000.If all the noncash assets are sold for $5,500,and each partner agrees to make up any capital deficits with personal cash contributions,Sandra eventually will receive cash of:

A partnership can be terminated by which of the following?

After several years of business,Abel,Barney,and Cole are liquidating.The following are post-closing account balances. Cash 18,000 Inventory 73,000 other assets 157,000 Accounts Payable 61,000 Abel, Capital 50,000 Earney, Capital 50,000 Cole, Capital 87,000 Non-cash assets are sold for $275,000.Profits and losses are shared equally. Record the sale of the noncash items.

Partnerships are subject to federal income tax.