Exam 17: Partnership

Mary and Jeff entered into a partnership agreement. However, the agreement did not state how income and losses would be divided. The law states that income will be divided:

The average capital balances of partners Bridget and Emily are $3,000 and $6,000, respectively. Bridget and Emily work full time in the business. The business earned net income of $12,000 for the period. The partners have agreed to share earnings based upon the percentage of original investment. Bridget's share of the net income is:

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?

When a partner withdraws, the partnership may have an audit to adjust the assets to their:

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:

Articles of partnership:

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:

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

The Securities and Exchange Commission Act defines a partnership as "an association of two or more persons to carry on as co-owners of a business for profit."

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:

The net income earned by the Cooper, Cross, and Crane partnership is $18,000. Their respective average capital balances are $20,000, $20,000, and $40,000. What is the closing entry to allocate the net income if no agreement was made for division of income?

The journal entry to close a net income to the partners is to:

Which of the following is true of a partnership?

When a partnership is terminated, the assets are turned into cash and obligations are paid. This process is called:

Given the following accounts: Indicate the account(s)to be debited and credited to record the following transactions. -Able partner invested cash in the business. Debit ________ & ________ & ________ Credit ________ & ________ & ________

After several years of business, Abel, Barney, and Cole are liquidating. The following are post-closing account balances. Non-cash assets are sold for $275,000. Profits and losses are shared equally. Record the sale of the noncash items.

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.

When the assets are sold at a loss and one partner cannot make up the deficit, the other partners have unlimited liability and must make up the deficit.

The partnership of Brandon and Ryan is being liquidated. All gains and losses are shared in a 3:1 ratio, respectively. Before liquidation, their balance sheet balances are as follows: a)If the Other Assets are sold for $10,000, how much will each partner receive before paying liabilities and distributing the remaining assets? b)If the Other Assets are sold for $8,000, how much will each partner receive before paying liabilities and distributing remaining assets?

Applying the interest allowance method, compute Taylor and Timmy's share of net income if Taylor invested $200,000 and Timmy invested $800,000 at a 6% interest rate, with the remainder to be divided equally. Net income was $75,000.