Exam 17: Partnership

Laura's investment in a new partnership includes $2,000 cash and equipment at a fair value of $7,000.The new partnership is assuming $1,500 of Laura's accounts payable.The partnership entry should be to:

In comparison with the proprietorship form of business organization,forming a partnership offers which of the following advantages?

If the retiring partner's interest is sold to one of the remaining partners,the retiring partner's equity is split equally between the remaining partners.

The sale of assets for liquidation purposes of a partnership is called:

David and Daniel formed a partnership.David invested $12,000,cash;Daniel invested $7,000 cash and equipment with a fair value of $5,000.The proper entry to record this is to:

A bonus paid by an incoming partner to the old partners is shared:

Sue and Jill,who have ending capital balances of $80,000 and $60,000 respectively,agree to admit two new partners.Carlos will buy 1/2 of Sue's interest for $20,000 and 1/4 of Jill's interest for $25,000 directly from the partners.Carmen will invest $40,000 for a $40,000 equity interest.Journalize the entry to admit Carlos and Carmen.

A partnership can be terminated by which of the following?

Allison and Josh are partners in a business.Allison's capital is $60,000 and Josh's capital is $100,000.Profits for the year are $80,000.They agree to share profits and losses as follows: Allison Josh Salaries \ 20,000 \ 40,000 Interest on capital 10\% 10\% Remaining profits and losses 3/5 2/5 Josh's share of the profit is:

Since all partners are bound together in the agreement and each acts on the behalf of the partnership,________ has been established.

The characteristic that means the actions of one partner are binding on all other partners is known as:

When the assets are sold at a loss and one partner cannot make up the deficit,the other partners have no liability to make up the deficit.

When the equity of a partnership is less than amounts recorded in the accounting records,an incoming partner may have to pay a bonus.

A Loss or Gain from Realization account is credited when the assets are sold at a loss during the liquidation process.

The average capital balances of partners Bridget and Emily are $5,000 and $15,000,respectively.Bridget and Emily work full time in the business.The business earned net income of $12,000 for the period.The partners have agreed to share earnings based upon the percentage of original investment.Bridget's share of the net income is:

Partner C invested equipment in the partnership and the equipment was recorded at its book value.This error would cause:

Partners Roger and Martin each have $3,000 capital balances and share income and losses in a 2:1 ratio for Roger and Martin,respectively.Cash equals $1,000,noncash assets total $10,000,and liabilities are $5,000.If all the noncash assets are sold for $4,000,Martin's capital account will:

Able accepted Baker into the partnership with an investment of cash,inventory,and store equipment,including accumulated depreciation. Debit ________ & ________ & ________ Credit ________ & ________

Bernstein is brought into the partnership.His capital is equal to his net assets that he brings to the partnership.He brings assets of $167,000 and liabilities of $30,000.His capital balance will be:

Applying the profit and loss ratio method,compute Taylor and Timmy's share of net income if Taylor invested $200,000 and Timmy invested $800,000 and the profit and loss ratio is 3:2.Net income was $75,000.