Exam 17: Partnership

Given the following accounts: Indicate the account(s)to be debited and credited to record the following transactions. -The business provided services on credit. Debit ________ & ________ & ________ Credit ________ & ________ & ________

Norm and Sam agreed on October 1, 2012 to enter into a partnership. Norm contributes $75,000 and Sam contributes $50,000. Journalize their initial investments.

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 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):

The actions of one partner are binding on all of the other partners. This characteristic is called:

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.

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:

David and Daniel formed a partnership. David invested $10,000, cash; Daniel invested $5,000 cash and equipment valued at $6,000. The proper entry to record this is to:

Which of the following is not generally written into the articles of partnership agreement?

Before calculating salary and interest allowances, it is necessary to determine whether net income will cover these expenses.

Tricia and Jennifer formed a partnership. Tricia invested $10,000 cash; Jennifer invested $5,000 cash, equipment valued at $6,000, and $1,000 accounts payable. The proper entry to record this is:

A general partner is:

What is the closing entry to allocate net income of $48,000 to Sara, Ellen, and Mary? Respective capital balances are $30,000, $40,000, and $30,000. No agreement was made for division of income.

The sale of assets for liquidation purposes of a partnership is called:

Discuss (a)the purpose of the articles of partnership, and (b)indicate the items that should be included.

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. After all liabilities are paid, divide the remaining cash amongst the partners.

An interest allowance is based on the beginning capital balance of each partner.

The agreed-upon ratio for dividing earnings or losses of a partnership is called:

When a partnership is dissolved:

If Blake invests $10,000 cash in a partnership, Cash is debited and Blake, Capital is credited, $10,000.