Question 1

Partners in a partnership are not taxed on their withdrawals , but rather on ________.

Accepted Answer

share of p

Question 2

Masters, Hardy, and Rowen are dissolving their partnership. Their partnership agreement allocates income and losses equally among the partners. The current period's ending capital account balances are Masters, $15,000; Hardy, $15,000; Rowen, $30,000. After all the assets are sold and liabilities are paid, but before any contributions to cover any deficiencies, there is $54,000 in cash to be distributed. The general journal entry to record the final distribution would be:

Accepted Answer

A)  Debit Masters, Capital $13,500; debit Hardy, Capital $13,500; debit Rowen, Capital $27,000; credit Cash $54,000. 
B)  Debit Cash $54,000; credit Rowen, Capital $13,500; credit Masters, Capital $13,500; credit Hardy, Capital $27,000. 
C)  Debit Masters, Capital $15,000; debit Hardy, Capital $15,000; debit Rowen, Capital $30,000; credit Loss from Liquidation $6000; credit Cash $54,000. 
D)  Debit Masters, Capital $15,000; debit Hardy, Capital $15,000; debit Rowen, Capital $30,000; credit Gain from Liquidation $6,000; credit Cash $54,000. 
E)  Debit Masters, Capital $13,000; debit Hardy, Capital $13,000; debit Rowen, Capital $28,000; credit Cash $54,000. 
A)  Debit Masters, Capital $13,500; debit Hardy, Capital $13,500; debit Rowen, Capital $27,000; credit Cash $54,000. 
B)  Debit Cash $54,000; credit Rowen, Capital $13,500; credit Masters, Capital $13,500; credit Hardy, Capital $27,000. 
C)  Debit Masters, Capital $15,000; debit Hardy, Capital $15,000; debit Rowen, Capital $30,000; credit Loss from Liquidation $6000; credit Cash $54,000. 
D)  Debit Masters, Capital $15,000; debit Hardy, Capital $15,000; debit Rowen, Capital $30,000; credit Gain from Liquidation $6,000; credit Cash $54,000. 
E)  Debit Masters, Capital $13,000; debit Hardy, Capital $13,000; debit Rowen, Capital $28,000; credit Cash $54,000.

Question 3

Bannister invested $110,000 and Wilder invested $99,000 in a new partnership. Their partnership agreement called for Wilder to receive a $70,000 annual salary allowance. Under this agreement, what are the income or loss shares of the partners if the annual partnership income is $90,000?

Accepted Answer

The answer of Bannister invested $110,000 and Wilder invested $99,000...

Question 4

Caitlin, Chris, and Molly are partners and share income and losses in a 3:4:3 ratio. The partnership's capital balances are Caitlin, $120,000; Chris, $80,000; and Molly, $100,000. Paul is admitted to the partnership on July 1 with a 20% equity and invests $160,000. 
-The balance in Paul's capital account immediately after his admission is:

Accepted Answer

A)  $160,000 
B)  $300,000 
C)  $460,000 
D)  $68,000 
E)  $92,000 
A)  $160,000 
B)  $300,000 
C)  $460,000 
D)  $68,000 
E)  $92,000

Question 5

Cinema Products LP is organized as a limited partnership that sells movie props. Information related to capital balances is given below. Compute the partner return on equity for each limited partner. How would each partner evaluate the success of the partnership? What would you recommend the partners do with respect to additional investments or withdrawals?
 $$\begin{array} { l r r r } 
& \text { Turner } & \text { Kelly } & \text { Total } \
\text { Capital balance, beginging of year } & 890,000 & 570,000 & 1,460,000 \
\text { Net income for current year } & 85,000 & 65,000 & 150,000 \
\text { Withdrawals for current year } & 40,000 & 25,000 & 65,000
\end{array}$$

Accepted Answer

Partner return on equity = Partner net i

Question 6

Wallace and Simpson formed a partnership with Wallace contributing $60,000 and Simpson contributing $40,000. Their partnership agreement calls for the income (loss) division to be based on the ratio of capital investments. The partnership had income of $150,000 for its first year of operation. When the Income Summary is closed, the journal entry to allocate partner income is:

Accepted Answer

A)  Debit Wallace, Capital $90,000; debit Simpson, Capital $60,000; credit Cash $150,000. 
B)  Debit Cash $150,000; credit Wallace, Capital $90,000; credit Simpson, Capital $60,000. 
C)  Debit Income Summary $150,000; credit Wallace, Capital $90,000; credit Simpson, Capital $60,000. 
D)  Debit Wallace, Capital $75,000; debit Simpson, Capital $75,000; credit Income Summary $150,000. 
E)  Debit Income Summary $150,000; credit Wallace, Capital $75,000; credit Simpson, Capital $75,000. 
A)  Debit Wallace, Capital $90,000; debit Simpson, Capital $60,000; credit Cash $150,000. 
B)  Debit Cash $150,000; credit Wallace, Capital $90,000; credit Simpson, Capital $60,000. 
C)  Debit Income Summary $150,000; credit Wallace, Capital $90,000; credit Simpson, Capital $60,000. 
D)  Debit Wallace, Capital $75,000; debit Simpson, Capital $75,000; credit Income Summary $150,000. 
E)  Debit Income Summary $150,000; credit Wallace, Capital $75,000; credit Simpson, Capital $75,000.

Question 7

A ________ is an unincorporated association of two or more people to pursue a business for profit as co-owners.

Accepted Answer

The answer of A ________ is an unincorporated association of...

Question 8

A partnership agreement:

Accepted Answer

A)  Is also called the articles of incorporation. 
B)  Does not generally address the issue of the rights and duties of the partners. 
C)  Is the same as a limited liability partnership. 
D)  Is not binding unless it is in writing. 
E)  Is binding even if it is not in writing. 
A)  Is also called the articles of incorporation. 
B)  Does not generally address the issue of the rights and duties of the partners. 
C)  Is the same as a limited liability partnership. 
D)  Is not binding unless it is in writing. 
E)  Is binding even if it is not in writing.

Question 9

Match between columns
                        Premises:  A financial statement that shows total capital balances at the beginning of the period, any additional investment by partners, the income or loss of the period, the partners' withdrawals, and the ending capital balances.
 A partnership that has two classes of partners, limited partners and general partners. Limited partners have no personal liability beyond the amount they invest in the partnership, and have no active role except as specified in the partnership agreement.
 A partnership that protects innocent partners from malpractice or negligence claims resulting from the acts of another partner.
 The legal relationship among general partners that makes each of them personally responsible for paying the debts of the partnership if the partnership cannot pay.
 The agreement between partners that sets terms under which the affairs of the partnership are conducted.
 An unincorporated association of two or more persons to pursue a business for profit as co-owners.
 A partner who assumes unlimited liability for the debts of the partnership.
 The legal relationship among partners whereby each partner can commit or bind the partnership to any contract within the scope of the partnership's business.
 A corporation that does not qualify for nor elect to be treated as a partnership for income tax purposes and therefore is subject to income taxes.
 A corporation with 100 or fewer stockholders that can elect to be treated as a partnership for income tax purposes but retain the same limited liability as other corporations.

Accepted Answer

The Answer of S corporation and Mutual agency and Partnership is...

Question 10

The partnership agreement for Wilson, Pickett & Nelson, a general partnership, provided that profits be shared between the partners in the ratio of their financial contributions to the partnership. Wilson contributed $100,000, Pickett contributed $50,000 and Nelson contributed $50,000. In the partnership's first year of operation, it incurred a loss of $110,000. What amount of the partnership's loss, rounded to the nearest dollar, should be absorbed by Nelson?

Accepted Answer

A)  $36,667 
B)  $40,000 
C)  $27,500 
D)  $0 
E)  $50,000 
A)  $36,667 
B)  $40,000 
C)  $27,500 
D)  $0 
E)  $50,000

Question 11

Admitting a partner by accepting assets is a personal transaction between one or more current partners and the new partner.

Accepted Answer

A) True 
 B)False

Question 12

Partners' withdrawals are debited to their separate withdrawals accounts.

Accepted Answer

A) True 
 B)False

Question 13

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

Accepted Answer

A)  Receiving assets from the partnership in the amount of his/her interest. 
B)  Selling his/her interest to another person for cash. 
C)  Receiving cash from the partnership in the amount of his/her interest. 
D)  Close the business and liquidate the assets under the mutual agency principle. 
E)  Selling his/her interest to another person in exchange for assets. 
A)  Receiving assets from the partnership in the amount of his/her interest. 
B)  Selling his/her interest to another person for cash. 
C)  Receiving cash from the partnership in the amount of his/her interest. 
D)  Close the business and liquidate the assets under the mutual agency principle. 
E)  Selling his/her interest to another person in exchange for assets.

Question 14

Define the partner return on equity ratio and explain how a specific partner would use this ratio.

Accepted Answer

The partner return on equity ratio is ca

Question 15

Conklin plans to leave the CAP Partnership. The recorded balance in her capital account is
$48,000. The remaining partners, Arthurs and Preston, agree to pay Conklin $58,000 cash and Conklin accepts. The partners share income and loss equally. Prepare the journal entry to record the transaction.

Accepted Answer

None

Question 16

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.

Accepted Answer

None

Question 17

What factors should be considered before establishing a partnership?

Accepted Answer

Anyone considering forming a partnership

Question 18

A capital deficiency exists when at least one partner has a debit balance in his or her capital account at the point of final cash distribution during liquidation.

Accepted Answer

A) True 
 B)False

Question 19

Bloom and Plant organize a partnership on January 1. Bloom's initial investment consists of $800 cash, $1,700 equipment and a $500 note payable reflecting a bank loan for the new business. Plant's initial investment is cash of $2,000. These amounts are the values agreed on by both partners. The journal entry to record Plant's investment is:

Accepted Answer

A)  Debit Cash $2,500; credit Note Payable $500; credit Plant, Capital $2,500. 
B)  Debit Cash $1,500; debit Note Payable $500; credit Plant, Capital $2,000. 
C)  Debit Cash $2,000; credit Note Payable $500, credit Plant, Capital $1,500. 
D)  Debit Cash $2,000; credit Plant, Capital $2,000. 
E)  Debit Bloom, Capital $2,000; credit Cash $2,000. 
A)  Debit Cash $2,500; credit Note Payable $500; credit Plant, Capital $2,500. 
B)  Debit Cash $1,500; debit Note Payable $500; credit Plant, Capital $2,000. 
C)  Debit Cash $2,000; credit Note Payable $500, credit Plant, Capital $1,500. 
D)  Debit Cash $2,000; credit Plant, Capital $2,000. 
E)  Debit Bloom, Capital $2,000; credit Cash $2,000.

Question 20

The end of a partnership is referred to as its dissolution.

Accepted Answer

A) True 
 B)False

Partners in a partnership are not taxed on their withdrawals , but rather on ________.

Bannister invested $110,000 and Wilder invested $99,000 in a new partnership. Their partnership agreement called for Wilder to receive a $70,000 annual salary allowance. Under this agreement, what are the income or loss shares of the partners if the annual partnership income is $90,000?

A ________ is an unincorporated association of two or more people to pursue a business for profit as co-owners.

A partnership agreement:

Admitting a partner by accepting assets is a personal transaction between one or more current partners and the new partner.

Partners' withdrawals are debited to their separate withdrawals accounts.

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

Define the partner return on equity ratio and explain how a specific partner would use this ratio.

Conklin plans to leave the CAP Partnership. The recorded balance in her capital account is $48,000. The remaining partners, Arthurs and Preston, agree to pay Conklin $58,000 cash and Conklin accepts. The partners share income and loss equally. Prepare the journal entry to record the transaction.

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.

What factors should be considered before establishing a partnership?

A capital deficiency exists when at least one partner has a debit balance in his or her capital account at the point of final cash distribution during liquidation.

The end of a partnership is referred to as its dissolution.

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories and Cost of Sales

Accounting Information Systems

Cash and Internal Controls

Accounting for Receivables

Plant Assets Natural Resoures and Intangibles

Current Liabilities and Payroll Accounting

Accounting for Corporations

Long-Term Liabilities

Investments

Reporting the Statement of Cash Flows

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Job Order Costing

Process Costing

Cost-Volume-Profit Analysis

Master Budgets and Planning

Flexible Budgets and Standard Costs

Performance Measurement and Responsibility Accounting

Capital Budgeting and Managerial Decisions

Present and Future Values in Accounting

Activity-Based Costing

Filters

Exam 12: Accounting for Partnerships

Partners in a partnership are not taxed on their withdrawals , but rather on ________.

Bannister invested $110,000 and Wilder invested $99,000 in a new partnership. Their partnership agreement called for Wilder to receive a $70,000 annual salary allowance. Under this agreement, what are the income or loss shares of the partners if the annual partnership income is $90,000?

A ________ is an unincorporated association of two or more people to pursue a business for profit as co-owners.

A partnership agreement:

Admitting a partner by accepting assets is a personal transaction between one or more current partners and the new partner.

Partners' withdrawals are debited to their separate withdrawals accounts.

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

Define the partner return on equity ratio and explain how a specific partner would use this ratio.

Conklin plans to leave the CAP Partnership. The recorded balance in her capital account is $48,000. The remaining partners, Arthurs and Preston, agree to pay Conklin $58,000 cash and Conklin accepts. The partners share income and loss equally. Prepare the journal entry to record the transaction.

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.

What factors should be considered before establishing a partnership?

A capital deficiency exists when at least one partner has a debit balance in his or her capital account at the point of final cash distribution during liquidation.

The end of a partnership is referred to as its dissolution.

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories and Cost of Sales

Accounting Information Systems

Cash and Internal Controls

Accounting for Receivables

Plant Assets Natural Resoures and Intangibles

Current Liabilities and Payroll Accounting

Accounting for Corporations

Long-Term Liabilities

Investments

Reporting the Statement of Cash Flows

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Job Order Costing

Process Costing

Cost-Volume-Profit Analysis

Master Budgets and Planning

Flexible Budgets and Standard Costs

Performance Measurement and Responsibility Accounting

Capital Budgeting and Managerial Decisions

Present and Future Values in Accounting

Activity-Based Costing

Filters