Exam 16: Partnership Accounting

Partners are taxed on their withdrawals,not on their share of partnership income.

Lemon and Parks are partners.On October 1,Lemon's capital balance is $75,000,and Parks' capital balance is $125,000.With the partnership's approval,Parks sells ½ of his partnership interest to Tambling for $70,000.Prepare the journal entry to record this transaction in the partnership records.

When a partner invests in a partnership,his/her capital account is ________ for the invested amount.

During the closing process,each partner's withdrawals account is closed to ________.

Partners' withdrawals of assets are:

Carter Pearson is a partner in Event Promoters.His beginning partnership capital balance for the current year is $55,000,and his ending partnership capital balance for the current year is $62,000.His share of this year's partnership income was $6,250.What is his partner return on equity?

A partnership recorded the following journal entry: Cash 60,000 B. Founder, Capital 10,000 R. Aqui, Capital 10,000 H. Joiner, Capital 80,000 This entry reflects:

Kramer and Feldman Company is organized as a partnership.At the prior year-end,Kramer's equity balance was $352,000 and Feldman's was $256,000.For the current year,partnership net income is $137,000 ($77,000 allocated to Kramer and $60,000 allocated to Feldman); withdrawals are $87,000 ($45,000 for Kramer and $42,000 for Feldman).Compute the total partnership return on equity and the individual partner return on equity ratios.

Fontaine and Monroe are forming a partnership.Fontaine invests a building that has a market value of $250,000; the partnership assumes responsibility for a $75,000 note secured by a mortgage on the property.Monroe invests $100,000 in cash and equipment that has a market value of $55,000. -For the partnership,the amounts recorded for Fontaine's Capital account and for Monroe's Capital account are:

If at the time of partnership liquidation,a partner has a $5,000 capital deficiency and pays the partnership $5,000 out of personal assets to cover the deficiency,then that partner is entitled to share in the final distribution of cash.

Darien and Hayden agree to accept Kevin into their partnership.Kevin will contribute $22,000 in cash.Prepare the journal entry to record this transaction.

Bannister invested $110,000 and Wilder invested $99,500 in a new partnership.They agreed to an annual interest allowance of 10% on the partners' beginning-year capital balance,with the balance of income or loss to be divided equally.Under this agreement,what are the income or loss shares of the partners if the annual partnership income is $202,000?

A partner can withdraw from a partnership by any of the following means except:

When a partner leaves a partnership,the withdrawing partner is entitled to a bonus if the recorded equity is overstated.

In the absence of a partnership agreement,the law says that income (and loss)should be allocated based on:

Assets invested by a partner into a partnership become the property of the business.

Reno contributed $104,000 in cash plus equipment valued at $27,000 to the RD Partnership.The journal entry to record the transaction for the partnership is:

Mutual agency implies that each partner in a partnership is a fully authorized agent of the partnership.Which of the following statements is correct regarding the authority of a partner to bind the partnership in dealings with third parties?

In a limited partnership the general partner has unlimited liability.

When partners invest in a partnership,their capital accounts are debited for the amount invested.