Question 1

Disadvantages of a partnership include:

Accepted Answer

A)  Limited life. 
B)  Mutual agency. 
C)  Unlimited liability. 
D)  Co-ownership of property. 
E)  All of these answers are correct. 
A)  Limited life. 
B)  Mutual agency. 
C)  Unlimited liability. 
D)  Co-ownership of property. 
E)  All of these answers are correct.

Question 2

A capital deficiency exists when all partners have a credit balance in their capital accounts.

Accepted Answer

A) True 
 B)False

Question 3

Armstrong is anxious to leave the JT Partnership.At this time her capital account is $48,000.The remaining partners,Tanner and Jackson,agree to pay Armstrong $40,000 in cash.Prepare the journal entry to record the withdrawal.Assume the partners have no agreement for sharing profits and losses.

Accepted Answer

The answer of Armstrong is anxious to leave the JT...

Question 4

Copote and Parsons formed a partnership with capital contributions of $60,000 and $90,000 respectively.Their partnership agreement called for Copote to receive a $12,000 annual salary allowance,and each partner to receive a share of net income equal to a 10% return on capital investments.The remaining income or loss is to be divided 40% to Copote and 60% to Parsons.If the net income for the year is $84,000,what are Copote's and Parson's respective shares?

Accepted Answer

The answer of Copote and Parsons formed a partnership with...

Question 5

With the consent of the other partners,Parker decides to sell one half of his $30,000 interest in the ABC Partnership to Lopez privately for $14,000.Prepare the journal entry to record the transaction.

Accepted Answer

The answer of With the consent of the other partners,Parker...

Question 6

Nguyen invested $8,000 and Hansen invested $12,000 in a partnership.They agreed to share incomes and losses by allowing a $9,000 per year salary allowance to Nguyen and a $12,000 per year salary allowance to Hansen,plus interest on the partners' investments at 10%,with the balance to be shared equally.Under this agreement,the shares of the partners with a $51,000 net income are:

Accepted Answer

A)  $10,500 to Nguyen; $10,500 to Hansen. 
B)  $9,000 to Nguyen; $12,000 to Hansen. 
C)  $26,000 to Nguyen; $25,000 to Hansen. 
D)  $23,800 to Nguyen; $27,200 to Hansen. 
E)  $14,500 to Nguyen; $35,500 to Hansen. 
A)  $10,500 to Nguyen; $10,500 to Hansen. 
B)  $9,000 to Nguyen; $12,000 to Hansen. 
C)  $26,000 to Nguyen; $25,000 to Hansen. 
D)  $23,800 to Nguyen; $27,200 to Hansen. 
E)  $14,500 to Nguyen; $35,500 to Hansen.

Question 7

A partnership designed to protect innocent partners from malpractice or negligence claims resulting from acts of another partner is a:

Accepted Answer

A)  Partnership. 
B)  Limited partnership. 
C)  Limited liability partnership. 
D)  General partnership. 
E)  Limited liability company. 
A)  Partnership. 
B)  Limited partnership. 
C)  Limited liability partnership. 
D)  General partnership. 
E)  Limited liability company.

Question 8

Mung and Long allow Kang to join their partnership for $50,000 cash.The recorded value of the equity being purchased is $40,000.Prepare the journal entry to record the admission of Kang to the partnership.Assume the partners have no agreement for sharing profits and losses.

Accepted Answer

The answer of Mung and Long allow Kang to join...

Question 9

The withdrawal accounts of each partner are closed to retained earnings.

Accepted Answer

A) True 
 B)False

Question 10

When a partner leaves a partnership,the withdrawing partner is entitled to a bonus if the recorded equity is overstated.

Accepted Answer

A) True 
 B)False

Question 11

When a new partner is added to a partnership:

Accepted Answer

A)  The partnership ends. 
B)  The underlying business ends. 
C)  The underlying business continues. 
D)  The partnership continues. 
E)  The partnership ends,but the underlying business continues. 
A)  The partnership ends. 
B)  The underlying business ends. 
C)  The underlying business continues. 
D)  The partnership continues. 
E)  The partnership ends,but the underlying business continues.

Question 12

If a partnership contract provides for interest at 10% annually on each partner's investment,the interest:

Accepted Answer

A)  Is ignored when earnings are not sufficient to pay interest. 
B)  Provides for the sharing of a portion of the partnership earnings in the capital ratio. 
C)  Is an expense of the business. 
D)  Must be paid in cash. 
E)  Legally becomes a liability of the partnership. 
A)  Is ignored when earnings are not sufficient to pay interest. 
B)  Provides for the sharing of a portion of the partnership earnings in the capital ratio. 
C)  Is an expense of the business. 
D)  Must be paid in cash. 
E)  Legally becomes a liability of the partnership.

Question 13

Armstrong plans to leave the JT Partnership.At this time her capital account is $48,000.The remaining partners,Tanner and Jackson,agree to pay Armstrong $58,000.Prepare the journal entry to record the withdrawal.Assume the partners have no agreement for sharing profits and losses.

Accepted Answer

The answer of Armstrong plans to leave the JT Partnership.At...

Question 14

The partners of the Blue Tooth Partnership agree to liquidate.After all liabilities of $100,000 are paid,the partnership's cash balance is $110,000,and the capital account balances are: Peters,$60,000; Winslow,$20,000; and Wong,$30,000.Prepare the journal entry to distribute the ending cash.

Accepted Answer

The answer of The partners of the Blue Tooth Partnership...

Question 15

Armstrong withdraws from the JT Partnership.At this time her capital account is $35,000.The remaining partners agree to pay her $35,000 for her interest.Prepare the journal entry to record the withdrawal.

Accepted Answer

The answer of Armstrong withdraws from the JT Partnership.At this...

Question 16

When the current market value of a partnership is greater than the recorded amounts of equity,the partners usually require the new partner to pay a bonus for joining.

Accepted Answer

A) True 
 B)False

Question 17

If at the time of partnership liquidation,Breck has a $5,000 capital deficiency and pays the partnership $5,000 to cover the deficiency,then Breck is entitled to share in the final distribution of cash.

Accepted Answer

A) True 
 B)False

Question 18

When a partner is unable to pay a capital deficiency:

Accepted Answer

A)  The partner must take out a loan to cover the deficiency. 
B)  The deficiency is absorbed by the remaining partners. 
C)  The partnership ends. 
D)  The deficient partner has a personal liability to the other partners. 
E)  The deficiency is absorbed by the remaining partners and the deficient partner has a personal liability to the other partners. 
A)  The partner must take out a loan to cover the deficiency. 
B)  The deficiency is absorbed by the remaining partners. 
C)  The partnership ends. 
D)  The deficient partner has a personal liability to the other partners. 
E)  The deficiency is absorbed by the remaining partners and the deficient partner has a personal liability to the other partners.

Question 19

When partners form a partnership,their capital accounts are __________ for the amounts invested.

Accepted Answer

The answer of When partners form a partnership,their capital accounts...

Question 20

The fact that partnership assets are owned jointly by all partners is called:

Accepted Answer

A)  Mutual agency. 
B)  Unlimited liability. 
C)  Co-ownership of property. 
D)  Limited partnership. 
E)  Sole proprietorship. 
A)  Mutual agency. 
B)  Unlimited liability. 
C)  Co-ownership of property. 
D)  Limited partnership. 
E)  Sole proprietorship.

Disadvantages of a partnership include:

A capital deficiency exists when all partners have a credit balance in their capital accounts.

Armstrong is anxious to leave the JT Partnership.At this time her capital account is $48,000.The remaining partners,Tanner and Jackson,agree to pay Armstrong $40,000 in cash.Prepare the journal entry to record the withdrawal.Assume the partners have no agreement for sharing profits and losses.

With the consent of the other partners,Parker decides to sell one half of his $30,000 interest in the ABC Partnership to Lopez privately for $14,000.Prepare the journal entry to record the transaction.

A partnership designed to protect innocent partners from malpractice or negligence claims resulting from acts of another partner is a:

Mung and Long allow Kang to join their partnership for $50,000 cash.The recorded value of the equity being purchased is $40,000.Prepare the journal entry to record the admission of Kang to the partnership.Assume the partners have no agreement for sharing profits and losses.

The withdrawal accounts of each partner are closed to retained earnings.

When a partner leaves a partnership,the withdrawing partner is entitled to a bonus if the recorded equity is overstated.

When a new partner is added to a partnership:

If a partnership contract provides for interest at 10% annually on each partner's investment,the interest:

Armstrong plans to leave the JT Partnership.At this time her capital account is $48,000.The remaining partners,Tanner and Jackson,agree to pay Armstrong $58,000.Prepare the journal entry to record the withdrawal.Assume the partners have no agreement for sharing profits and losses.

The partners of the Blue Tooth Partnership agree to liquidate.After all liabilities of $100,000 are paid,the partnership's cash balance is $110,000,and the capital account balances are: Peters,$60,000; Winslow,$20,000; and Wong,$30,000.Prepare the journal entry to distribute the ending cash.

Armstrong withdraws from the JT Partnership.At this time her capital account is $35,000.The remaining partners agree to pay her $35,000 for her interest.Prepare the journal entry to record the withdrawal.

When the current market value of a partnership is greater than the recorded amounts of equity,the partners usually require the new partner to pay a bonus for joining.

If at the time of partnership liquidation,Breck has a $5,000 capital deficiency and pays the partnership $5,000 to cover the deficiency,then Breck is entitled to share in the final distribution of cash.

When a partner is unable to pay a capital deficiency:

When partners form a partnership,their capital accounts are __________ for the amounts invested.

The fact that partnership assets are owned jointly by all partners is called:

Property,plant and Equipment,and Intangibles

Current Liabilities

Organization and Operation of Corporations

Corporate Reporting: Income,earnings Per Share,and Retained Earnings

Bonds and Long-Term Notes Payable

Accounting for Debt and Share Investments

Reporting and Analyzing Cash Flows

Analyzing Financial Statements

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Exam 12: Partnerships

Disadvantages of a partnership include:

A capital deficiency exists when all partners have a credit balance in their capital accounts.

Armstrong is anxious to leave the JT Partnership.At this time her capital account is $48,000.The remaining partners,Tanner and Jackson,agree to pay Armstrong $40,000 in cash.Prepare the journal entry to record the withdrawal.Assume the partners have no agreement for sharing profits and losses.

With the consent of the other partners,Parker decides to sell one half of his $30,000 interest in the ABC Partnership to Lopez privately for $14,000.Prepare the journal entry to record the transaction.

A partnership designed to protect innocent partners from malpractice or negligence claims resulting from acts of another partner is a:

Mung and Long allow Kang to join their partnership for $50,000 cash.The recorded value of the equity being purchased is $40,000.Prepare the journal entry to record the admission of Kang to the partnership.Assume the partners have no agreement for sharing profits and losses.

The withdrawal accounts of each partner are closed to retained earnings.

When a partner leaves a partnership,the withdrawing partner is entitled to a bonus if the recorded equity is overstated.

When a new partner is added to a partnership:

If a partnership contract provides for interest at 10% annually on each partner's investment,the interest:

Armstrong plans to leave the JT Partnership.At this time her capital account is $48,000.The remaining partners,Tanner and Jackson,agree to pay Armstrong $58,000.Prepare the journal entry to record the withdrawal.Assume the partners have no agreement for sharing profits and losses.

The partners of the Blue Tooth Partnership agree to liquidate.After all liabilities of $100,000 are paid,the partnership's cash balance is $110,000,and the capital account balances are: Peters,$60,000; Winslow,$20,000; and Wong,$30,000.Prepare the journal entry to distribute the ending cash.

Armstrong withdraws from the JT Partnership.At this time her capital account is $35,000.The remaining partners agree to pay her $35,000 for her interest.Prepare the journal entry to record the withdrawal.

When the current market value of a partnership is greater than the recorded amounts of equity,the partners usually require the new partner to pay a bonus for joining.

If at the time of partnership liquidation,Breck has a $5,000 capital deficiency and pays the partnership $5,000 to cover the deficiency,then Breck is entitled to share in the final distribution of cash.

When a partner is unable to pay a capital deficiency:

When partners form a partnership,their capital accounts are __________ for the amounts invested.

The fact that partnership assets are owned jointly by all partners is called:

Property,plant and Equipment,and Intangibles

Current Liabilities

Organization and Operation of Corporations

Corporate Reporting: Income,earnings Per Share,and Retained Earnings

Bonds and Long-Term Notes Payable

Accounting for Debt and Share Investments

Reporting and Analyzing Cash Flows

Analyzing Financial Statements

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