Question 1

By what methods can a person gain admittance to a partnership?

Accepted Answer

A person can gain admittance t

Question 2

Cleary, Wasser, and Nolan formed a partnership on January 1, 2010, with investments of $100,000, $150,000, and $200,000, respectively. For division of income, they agreed to (1) interest of 10% of the beginning capital balance each year, (2) annual compensation of $10,000 to Wasser, and (3) sharing the remainder of the income or loss in a ratio of 20% for Cleary, and 40% each for Wasser and Nolan. Net income was $150,000 in 2010 and $180,000 in 2011. Each partner withdrew $1,000 for personal use every month during 2010 and 2011.
-What was the amount of interest attributed to Wasser for 2011?

Accepted Answer

A)  $17,600 
B)  $18,800 
C)  $20,100 
D)  $17,800 
E)  $30,100 
A)  $17,600 
B)  $18,800 
C)  $20,100 
D)  $17,800 
E)  $30,100

Question 3

The ABCD Partnership has the following balance sheet at January 1, 2010, prior to the admission of new partner, Eden. 
$$\begin{array} { l r l r r } 
\text { Cash and current assets } & \$ 39,000 & \text { Liabilities } & \$ 52,000 \
\text { Land } & 234,000 & \text { Adams, capital } & 26,000 \
\text { Building and equipment } & 130,000 & \text { Barnes, capital } & 52,000 \
& & \text { Cordas, capital } & 117,000 \
& & \text { Davis, capital } & 156,000 \
\hline \text { Total } & \$ 403,000 & \text { Total } & \$ 403,000 \
\hline \hline
\end{array}$$
-Eden contributes $49,000 into the partnership for a 25% interest. The four original partners share profits and losses equally. Using the bonus method, determine the balances for each of the five partners after Eden joins the partnership.

Accepted Answer

Eden's contribution of $49,000 into the

Question 4

Brown and Green are forming a business as partners. If they do not create a formal written partnership agreement, what risks are they exposing themselves to?

Accepted Answer

The Articles of Partnership should help

Question 5

The partnership of Clapton, Seidel, and Thomas was insolvent and will be unable to pay $30,000 in liabilities currently due. What recourse was available to the partnership's creditors?

Accepted Answer

A)  they must present equal claims to the three partners as individuals. 
B)  they must try obtain a payment from the partner with the largest capital account balance. 
C)  they cannot seek remuneration from the partners as individuals. 
D)  they may seek remuneration from any partner they choose. 
E)  they must present their claims to the three partners in the order of the partners' capital account balances. 
A)  they must present equal claims to the three partners as individuals. 
B)  they must try obtain a payment from the partner with the largest capital account balance. 
C)  they cannot seek remuneration from the partners as individuals. 
D)  they may seek remuneration from any partner they choose. 
E)  they must present their claims to the three partners in the order of the partners' capital account balances.

Question 6

Norr and Caylor established a partnership on January 1, 2010. Norr invested cash of $100,000 and Caylor invested $30,000 in cash and equipment with a book value of $40,000 and fair value of $50,000. For both partners, the beginning capital balance was to equal the initial investment. Norr and Caylor agreed to the following procedure for sharing profits and losses:
- 12% interest on the yearly beginning capital balance
- $10 per hour of work that can be billed to the partnership's clients
- the remainder divided in a 3:2 ratio
The Articles of Partnership specified that each partner should withdraw no more than $1,000 per month.
For 2010, the partnership's income was $70,000. Norr had 1,000 billable hours, and Caylor worked 1,400 billable hours. In 2011, the partnership's income was $24,000, and Norr and Caylor worked 800 and 1,200 billable hours respectively. Each partner withdrew $1,000 per month throughout 2010 and 2011.
-Determine the balance in both capital accounts at the end of 2011 to the nearest dollar.

Accepted Answer

Capital ac

Question 7

What theoretical argument could be made against the recognition of goodwill when there is a change in the ownership of a partnership?

Accepted Answer

Goodwill should be recognized only when

Question 8

Peter, Roberts, and Dana have the following capital balances; $80,000, $100,000 and $60,000, respectively. The partners share profits and losses 20%, 40%, and 40% respectively.
-Roberts retires and is paid $160,000 based on an independent appraisal of the business. If the goodwill method is used, what is the capital balance of Peter?

Accepted Answer

A)  $20,000. 
B)  $60,000. 
C)  $110,000. 
D)  $120,000. 
E)  $230,000. Roberts receives an additional $60,000 above her capital balance. Since she is assigned 40 percent of all profits and losses, this extra allocation indicates total goodwill of $150,000, which must be split among all partners.
40% of Goodwill = $60,000
)40 G = $60,000
G = $150,000 and Peter receives 20% = $30,000.
Peter's balance = $80,000 + $30,000 = $110,000. 
A)  $20,000. 
B)  $60,000. 
C)  $110,000. 
D)  $120,000. 
E)  $230,000. Roberts receives an additional $60,000 above her capital balance. Since she is assigned 40 percent of all profits and losses, this extra allocation indicates total goodwill of $150,000, which must be split among all partners.
40% of Goodwill = $60,000
)40 G = $60,000
G = $150,000 and Peter receives 20% = $30,000.
Peter's balance = $80,000 + $30,000 = $110,000.

By what methods can a person gain admittance to a partnership?

Brown and Green are forming a business as partners. If they do not create a formal written partnership agreement, what risks are they exposing themselves to?

The partnership of Clapton, Seidel, and Thomas was insolvent and will be unable to pay $30,000 in liabilities currently due. What recourse was available to the partnership's creditors?

What theoretical argument could be made against the recognition of goodwill when there is a change in the ownership of a partnership?

The Equity Method of Accounting for Investments

Consolidation of Financial Information

Consolidations-Subsequent to the Date of Acquisition

Consolidated Financial Statements and Outside Ownership

Consolidated Financial Statements - Intra-Entity Asset Transactions

Variable Interest Entities, Intra-Entity Debt, Consolidated Cash Flo

Consolidated Financial Statements - Ownership Patterns and Income

Segment and Interim Reporting

Foreign Currency Transactions and Hedging Foreign Exchange Risk

Translation of Foreign Currency Financial Statements

Worldwide Accounting Diversity and International Standards

Financial Reporting and the Securities and Exchange Commission

Accounting for Legal Reorganizations and Liquidations

Partnerships: Termination and Liquidation

Accounting for State and Local Governments

Accounting for State and Local Governments

Accounting and Reporting for Private Not-For-Profit Organizations

Accounting for Estates and Trusts

Filters

Exam 14: Partnerships: Formation and Operations

By what methods can a person gain admittance to a partnership?

Brown and Green are forming a business as partners. If they do not create a formal written partnership agreement, what risks are they exposing themselves to?

The partnership of Clapton, Seidel, and Thomas was insolvent and will be unable to pay $30,000 in liabilities currently due. What recourse was available to the partnership's creditors?

What theoretical argument could be made against the recognition of goodwill when there is a change in the ownership of a partnership?

The Equity Method of Accounting for Investments

Consolidation of Financial Information

Consolidations-Subsequent to the Date of Acquisition

Consolidated Financial Statements and Outside Ownership

Consolidated Financial Statements - Intra-Entity Asset Transactions

Variable Interest Entities, Intra-Entity Debt, Consolidated Cash Flo

Consolidated Financial Statements - Ownership Patterns and Income

Segment and Interim Reporting

Foreign Currency Transactions and Hedging Foreign Exchange Risk

Translation of Foreign Currency Financial Statements

Worldwide Accounting Diversity and International Standards

Financial Reporting and the Securities and Exchange Commission

Accounting for Legal Reorganizations and Liquidations

Partnerships: Termination and Liquidation

Accounting for State and Local Governments

Accounting for State and Local Governments

Accounting and Reporting for Private Not-For-Profit Organizations

Accounting for Estates and Trusts

Filters