Exam 12: Partnerships

Floyd and Merriam start a partnership business on June 12,2019.Their capital account balances as of December 31,2020 stood as follows: Floyd and Merriam share profits and losses equally.They agreed to dissolve the partnership and start a new one,admitting Ramelow for one-half share in the capital in exchange for land and equipment having a total market value of $72,000.Which of the following is the correct journal entry to record the introduction of Ramelow as a partner?

In a general partnership,each partner has limited personal liability for the debts of the business.

Before the start of the liquidation process,the books are adjusted and closed.

Albert,Billy,and Cathy share profits and losses of their partnership as 1:4:3,respectively.If the net income is $30,000,calculate Albert's share of the profits.

If a withdrawing partner receives assets worth more than the book value of his or her equity,the capital accounts of the remaining partners decrease.

Steve owns 64% and Mark owns 36% of a partnership business.They purchase equipment with a suggested value of $9,600.The current market value of the equipment at the time of purchase was $9,100.At the time of the balance sheet preparation,depreciation of $160 was recorded.Based on the information provided,which of the following is true of the partnership balance sheet?

Shaun and Rick are partners.Shaun has a capital balance of $12,000 and Rick has a capital balance of $10,000.Edwin invests a building with a current market value of $8,000 to acquire an interest in the new partnership.Which of the following is true of the effect of the transaction on the balance sheet? (Assume no bonus to any partner. )

Tim and Michelle have decided to form a partnership with a 60/40 partnership interest ratio.Tim contributes $7,500 cash and $1,500 in merchandise inventory.While journalizing this transaction ________.

Which of the following is an advantage of a partnership?

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?

Which of the following is true of a limited liability company?

Which of the following is an additional feature of a limited liability partnership compared to a limited partnership?

When a partner withdraws his or her interest in the partnership,both assets and equity will decrease.

A(n)________ must carry large insurance policies to protect the public in case the partnership is found guilty of malpractice.

The addition of a new partner to a firm does not dissolve the old partnership.

When a new partner is admitted to a partnership by purchasing an existing partner's interests,the business's accounting records do not record the transfer of cash from the new partner to the existing partner.

Which of the following types of business organizations pay business income taxes?

Which of the following is true of a liquidation of a partnership?

Floyd and Merriam start a partnership business on June 12,2019.Their capital account balances as of December 31,2020 stood as follows: They agreed to admit Ramelow into the business for a one-third interest in the new partnership.Ramelow contributes $24,000 cash in exchange for the partnership interest.What is the correct capital account balance of Ramelow after he enters the business?

Adam,Bill,and Charlie are partners.The profit and loss sharing rule between them is 2:5:3,with Bill getting the largest share and Adam receiving the smallest.The partnership incurs a net loss of $21,000.While closing the Income Summary ________.