Dalworth and Minor have decided to form a partnership. Minor is going to contribute a depreciable asset to the partnership as her equity contribution to the partnership. The following information regarding the asset to be contributed by Minor is available: $\begin{array} { l } \text { Historical cost of the asset}&\$276,000 \\ \text { Accumulated depreciation on the asset}&\$ 140,000\\ \text { Note payable secured by the asset and assumed by the partnership}&\$180,000 \\ \text { Agreed-upon market value of the asset}&\$ 245,000\\ \end{array}$ Based on this information, Minor's beginning equity balance in the partnership will be:

A) $158,000 B) $136,000 C) $276,000 D) $18,000 E) $127,000 A) $158,000 B) $136,000 C) $276,000 D) $18,000 E) $127,000

Cinema Products LP is organized as a limited partnership that sells movie props. Information related to the capital balances is given below. Compute the partnership return on equity. \[\begin{array} { l r r r } & \text { Turner } & \text { Kelly } & \text { Total } \\ \text { Capital balance, beginning of year } & 890,000 & 570,000 & 1,460,000 \\ \text { Net income for current year } & 85,000 & 65,000 & 150,000 \\ \text { Withdrawals for current year } & 40,000 & 25,000 & 65,000 \end{array}\]

Partnership return on equity = Partnersh

Harvey and Quick have decided to form a partnership. Harvey is going to contribute a depreciable asset to the partnership as his equity contribution to the partnership. The following information regarding the asset to be contributed by Harvey is available: $\begin{array}{ll} \text { Historical cost of the asset } & \$ 76,000 \\ \text { Accumulated depreciation on the asset } & \$ 40,000 \\ \text { Note payable secured by the asset } & \$ 18,000 \\ \text { Agreed-upon market value of the asset } & \$ 45,000 \end{array}$ *will be assumed by the partnership Based on this information, Harvey's beginning equity balance in the partnership will be:

A) $36,000 B) $27,000 C) $45,000 D) $76,000 E) $18,000 A) $36,000 B) $27,000 C) $45,000 D) $76,000 E) $18,000

Exam 12: Accounting for Partnerships

Bloom and Plant organize a partnership on January 1. Bloom's initial investment consists of $800 cash, $1,700 equipment and a $500 note payable reflecting a bank loan for the new business. Plant's initial investment is cash of $2,000. These amounts are the values agreed on by both partners. The journal entry to record Bloom's investment is:

(Multiple Choice)

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Question 101

A capital deficiency means that:

(Multiple Choice)

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Question 102

Barber and Atkins are partners in an accounting firm and share net income and loss equally. Barber's beginning partnership capital balance for the current year is $285,000, and Atkins' beginning partnership capital balance for the current year is $370,000. The partnership had net income of $250,000 for the year. Barber withdrew $90,000 during the year and Atkins withdrew $100,000. What is Barber's ending equity?

(Multiple Choice)

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Question 103

Explain the steps involved in the liquidation of a partnership.

(Essay)

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Question 104

In a partnership agreement, if the partners agreed to an interest allowance of 10% annually on each partner's investment, the interest allowance:

(Multiple Choice)

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Question 105

A capital deficiency can arise from liquidation losses, excessive withdrawals before liquidation, or recurring losses in prior periods.

(True/False)

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Question 106

Cox, North, and Lee form a partnership. Cox contributes $180,000, North contributes $150,000, and Lee contributes $270,000. Their partnership agreement calls for the income or loss division to be based on the ratio of capital invested. If the partnership reports income of $150,000 for its first year, what amount of income is credited to Cox's capital account?

(Multiple Choice)

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Question 107

Brown invested $200,000 and Freeman invested $150,000 in a partnership. They agreed to an interest allowance on the partners' beginning-year capital investments at 10%, with the balance to be shared equally. Under this agreement, the shares of the partners when the partnership earns $205,000 in income are:

(Multiple Choice)

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Question 108

Dalworth and Minor have decided to form a partnership. Minor is going to contribute a depreciable asset to the partnership as her equity contribution to the partnership. The following information regarding the asset to be contributed by Minor is available: Historical cost of the asset \2 76,000 Accumulated depreciation on the asset \ 140,000 Note payable secured by the asset and assumed by the partnership \1 80,000 Agreed-upon market value of the asset \ 245,000 Based on this information, Minor's beginning equity balance in the partnership will be:

(Multiple Choice)

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Question 109

An unincorporated association of two or more persons to pursue a business for profit as co-owners is a:

(Multiple Choice)

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Question 110

Admitting a partner by accepting assets is a personal transaction between one or more current partners and the new partner.

(True/False)

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Question 111

Cinema Products LP is organized as a limited partnership that sells movie props. Information related to the capital balances is given below. Compute the partnership return on equity. Turner Kelly Total Capital balance, beginning of year 890,000 570,000 1,460,000 Net income for current year 85,000 65,000 150,000 Withdrawals for current year 40,000 25,000 65,000

(Essay)

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Question 112

Total partnership income is reported to the IRS on Form 1065.

(True/False)

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Question 113

Partners are taxed on their withdrawals, not on their share of partnership income.

(True/False)

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Question 114

The statement of changes in partners' equity shows the beginning balance in retained earnings, plus investments, less withdrawals, plus the income (or less the loss)and the ending balance in retained earnings.

(True/False)

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Question 115

R. Stetson contributed $14,000 in cash plus office equipment valued at $7,000 to the SJ Partnership. The journal entry to record the transaction for the partnership is:

(Multiple Choice)

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Question 116

Identify and discuss the key characteristics of partnerships. Also, identify other organizations that possess partnership characteristics.

(Essay)

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Question 117

Harvey and Quick have decided to form a partnership. Harvey is going to contribute a depreciable asset to the partnership as his equity contribution to the partnership. The following information regarding the asset to be contributed by Harvey is available: Historical cost of the asset \ 76,000 Accumulated depreciation on the asset \ 40,000 Note payable secured by the asset \ 18,000 Agreed-upon market value of the asset \ 45,000 *will be assumed by the partnership Based on this information, Harvey's beginning equity balance in the partnership will be:

(Multiple Choice)

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Question 118

Current partners usually require any new partner to pay a bonus for the privilege of joining when the current value of a partnership is greater than the recorded amounts of equity.

(True/False)

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Question 119

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

(Multiple Choice)

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Question 120

Showing 101 - 120 of 133

A capital deficiency means that:

Explain the steps involved in the liquidation of a partnership.

In a partnership agreement, if the partners agreed to an interest allowance of 10% annually on each partner's investment, the interest allowance:

A capital deficiency can arise from liquidation losses, excessive withdrawals before liquidation, or recurring losses in prior periods.

An unincorporated association of two or more persons to pursue a business for profit as co-owners is a:

Admitting a partner by accepting assets is a personal transaction between one or more current partners and the new partner.

Total partnership income is reported to the IRS on Form 1065.

Partners are taxed on their withdrawals, not on their share of partnership income.

The statement of changes in partners' equity shows the beginning balance in retained earnings, plus investments, less withdrawals, plus the income (or less the loss)and the ending balance in retained earnings.

R. Stetson contributed $14,000 in cash plus office equipment valued at $7,000 to the SJ Partnership. The journal entry to record the transaction for the partnership is:

Identify and discuss the key characteristics of partnerships. Also, identify other organizations that possess partnership characteristics.

Current partners usually require any new partner to pay a bonus for the privilege of joining when the current value of a partnership is greater than the recorded amounts of equity.

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

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories and Cost of Sales

Accounting Information Systems

Cash and Internal Controls

Accounting for Receivables

Plant Assets, Natural Resoures, and Intangibles

Current Liabilities and Payroll Accounting

Accounting for Corporations

Long-Term Liabilities

Investments and International Operations

Reporting the Statement of Cash Flows

Analysis of Financial Statements

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