Exam 12: Partnerships

Marshall retires from the partnership of Marshall,Mark,and Dennis.Marshall had a capital balance of $25,000.If Marshall received $25,000 as final settlement,how will this transaction affect the balance sheet items?

An S corporation is a corporation with 100 or fewer stockholders that can elect to be taxed as a partnership.

Which of the following is TRUE of a partnership balance sheet?

Issac and Karl are partners.Issac has a capital balance of $25,000 and Karl has a capital balance of $20,000.Bill invested $15,000 to acquire an ownership interest of 30%.How does this transaction affect the balance sheet items?

Which of the following is a characteristic of a partnership?

Whenever a partner mix in a partnership changes,the old partnership ceases to exist and a new partnership begins.

The balance sheet of Ryan and Peter's partnership as of December 31,2018,is given below. Assets Liabilities Cash \ 17,000 Accounts Payable \ 15,000 Accounts Receivable 9000 Other liabilities 25,000 Furniture 28,000 Partners' Equity Equipment 40,000 Ryan, Capital 31,000 Other assets 8,000 Peter, Capital 31,000 Total assets \ 102,000 Total liabilities and partners' equity \ 102,000 Ryan and Peter share profits in the ratio 3:2.They liquidate the partnership.The furniture and equipment Sold at a loss of $50,000.The accounts receivable were collected in full and the other assets were written Off as worthless.The cash balance remaining to pay the liabilities is ________.

Anna and Naomi are partners.Anna has a capital balance of $49,000 and Naomi has a capital balance of $42,000.Gary invested $27,000 to acquire an ownership interest of $18,000.Which of the following is TRUE of the partnership journal entry to record the receipt of Gary's contribution? (Assume the existing partners equally divide the bonus.)

Gary,Peter,and Chris own a firm as partners.Gary has a capital balance of $22,000; Peter a capital balance of $42,000; and Chris has a capital balance of $32,000.As per the partnership agreement,Gary gets a profit share of 2/9; Peter has 4/9; and Chris has 3/9.Which of the following is TRUE,if Gary withdraws from the partnership by receiving $22,000?

Aries and Eros start a partnership with capital contributions of $36,000 and $55,000,respectively.Over the course of the year,Aries withdraws $5100 from the business in order to meet his personal expenses.Which of the following is the correct journal entry to record the above withdrawal?

Admission of a new partner,by contributing directly to the partnership,increases both assets and liabilities by the same amount.

In a general partnership,the partners have unlimited personal liability for the debts of the business.

Lori and Mike enter into a partnership and decide to share profits and losses as follows: 1.The first allocation is a salary allowance with Lori receiving $12,000 and Mike receiving $25,000. 2)The second allocation is 20% of the partners' capital balances at year end.On December 31,2019,the capital balances for Lori and Mike are $86,000 and $344,000,respectively. 3)Any remaining profit or loss is allocated equally. For the year ending December 31,2019,the partnership reported a net loss of $122,000.The journal entry to record the loss allocation will ________.

Profits and losses in a partnership must be shared based on each partner's capital balances.

In their business partnership,George has an ownership interest of 55% and Ben has an ownership interest of 45%.In the current year,they purchase equipment for $9900.In order to finance the equipment purchase,George makes a cash contribution of $7400 and Ben makes a cash contribution of $2500 to the partnership.Based on the information provided,which of the following is TRUE regarding the partnership balance sheet?

Which of the following is TRUE of a general partnership?

Steve and Roger allocate 2/3 of their partnership's profits and losses to Steve and 1/3 to Roger.If the net income of the firm is $30,000,calculate Roger's share of net income.(Do not round any intermediate calculations.)

Rex and Sandy are partners.Rex has a capital balance of $370,000 and Sandy has a capital balance of $280,000.Marcus contributes a building with a fair market value of $220,000 in order to acquire an interest in the partnership.What is Marcus's partnership share after he makes the investment?(Assume no bonus to any partner.Round the percentage to one decimal place.)

Andy and Ian formed a partnership on April 1,2019.Andy contributes equipment to the business that originally cost $82,000 and on which accumulated depreciation of $16,000 has been recorded.The current market value of the equipment is $74,000.The value of the equipment recorded in the partnership journal is ________.

The articles of partnership is a written contract between partners that specifies the name,location,and nature of the business; the duties of each partner; and the method of sharing profits and losses among the partners.