Exam 12: Accounting for Partnerships

On December 31,20x5,the X&Y Partnership had the following assets,liabilities,and partners' equity: When the partners agreed to liquidate the business,the assets were sold for $160,000 and the liabilities were paid.X and Y share profits and losses in a ratio of 3:1,respectively.What is the final cash distribution to each partner after liquidation?

Which of the following statements is correct regarding partnerships?

Leah,Cameron,and Ryan each receive a $20,000 salary,as well as 10 percent interest on their respective average investments of $120,000,$200,000,and $40,000.If they share remaining income and losses in a 2:1:3 ratio,respectively,by how much would Cameron's account increase or decrease (indicate a decrease by placing parentheses around the amount),assuming (a)net income of $144,000, (b)net income of $72,000,and (c)net loss of $72,000.

Which of the following describes a joint venture?

Partner X purchases Partner Y's $25,000 interest from Partner Y for $30,000.The entry to record the transaction is for $30,000.

Erin,Rachel,and Travis are partners in ERT Company,with average capital balances for the year of $60,000,$80,000,and $40,000,respectively.They share remaining income and losses in a 2:5:3 ratio,respectively,after each receives a $30,000 salary and 10 percent interest on his or her average capital balance.In the journal provided,prepare the entries without explanations to close income or loss into their Capital accounts,assuming (a)net income of $148,000, (b)net income of $28,000,and (c)net loss of $12,000.

A partner invests into a partnership a building with a $50,000 carrying value and $40,000 fair market value.The related mortgage payable of $25,000 is assumed by the partnership.The entry to record the investment in partnership is:

A __________ is an association of two or more entities for the purpose of achieving a specific goal,such as the manufacture of a product in a new market.

A partner invests into a partnership a building with a $50,000 carrying value and $80,000 fair market value.The related mortgage payable of $25,000 is assumed by the partnership.The entry to record the investment in partnership is:

Chelsea,Harold,and Ryan are liquidating their business.They share income and losses in a 1:2:3 ratio,respectively,and currently have capital balances of $30,000,$26,000,and $24,000,respectively.In addition,the partnership has $10,000 in cash,$30,000 in accounts payable,and $100,000 in noncash assets.Chelsea and Harold are personally solvent,but Ryan is not.Assuming that the noncash assets are sold for $40,000,prepare all liquidation entries in the journal provided without explanation.

A limited partnership

A partner invests into a partnership a building with a $50,000 carrying value and $80,000 fair market value.The related mortgage payable of $25,000 is not assumed by the partnership.The entry to record the investment in partnership is:

Austin invests $80,000 for a 20 percent interest in a partnership that has capital totaling $300,000 after admitting Austin.Which of the following is true?

Cortney invests $80,000 for a 10 percent interest in a partnership that has total capital of $600,000 after admitting Cortney.Which of the following is true?

Unlimited liability refers to

Which of the following will not result in dissolution of a partnership?

In a partnership liquidation,the Gain or Loss from Realization

When a new partner is admitted,the old partnership agreement is still in effect.

It is possible for a partner's Capital account to increase even if a net loss occurs.

Partners K and R receive an interest allowance of $20,000 and $30,000,respectively,and divide the remaining profits and losses in a 3:1 ratio.If the company sustained a net loss of $22,000 during the year,the entry to close the income or loss into their capital accounts is: