Question 1

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

Accepted Answer

A) True 
 B)False  False

Question 2

Beard,Tanner,Williams are operating as a partnership.The capital account balances at December 31,2013 are $254,000,$195,000 and $286,000 respectively.Record the entries for the following independent situations.
a.The partners vote to admit Sturges.She is going to invest $150,000 for a 15% interest in the partnership.Profit and losses are split equally between the existing partners.
b.Sturges agrees to buy 50% of Williams interest by paying him $150,000 directly.
c.The partners need new ideas and agree to give Sturges a 20% interest in exchange for $150,000.Profits and losses are shared equally between the existing partners.
d.Williams wants to retire and is willing to leave the partnership in exchange for $281,000.Profits and losses were shared on the ratio of 2:3:5.

Accepted Answer

$$\begin{array} { | l | l | r | r | } 
\hline \text { a. } & \text { Cash } & 150,000 & \
\hline & \text { Beard, Capital } & & 5750 \
\hline & \text { Tanner, Capital } & & 5750 \
\hline & \text { Williams, Capital } & & 5750 \
\hline & \text { Sturges, Capital } & & 132,750 \
\hline & & & \
\hline \text { b. } & \text { Williams, Capital } & 143,000 & \
\hline & \text { Sturges, Capital } & & 143,000 \
\hline & & & \
\hline \text { c. } & \text { Cash } & 150,000 & \
\hline & \text { Beard, Capital } & 9,000 & \
\hline & \text { Tanner, Capital } & 9,000 & \
\hline & \text { Williams, Capital } & 9,000 & \
\hline & \text { Sturges, Capital } & & 177,000 \
\hline & & & \
\hline \text { d. } & \text { Williams, Capital } & 286,000 & \
\hline & \text { Beard, Capital } & & 2,000 \
\hline & \text { Tanner, Capital } & & 3,000 \
\hline & \text { Cash } & & 281,000 \
\hline
\end{array}$$

Question 3

A partnership recorded the following journal entry:
$\begin{array}{ | l | r| r| }
\hline \text{Cash} \ldots \ldots \ldots \ldots \ldots\ldots \ldots \ldots \ldots \ldots& 70,000  & \
\hline \text{B. Tanner, Capital} \ldots \ldots \ldots  & 10,000\
\hline \text{R. Jackson, Capital} \ldots \ldots \ldots&   10,000\
\hline \text{ \quad H. Rivera, Capital} \ldots \ldots \ldots& &  90,000\
\hline
\end{array}$
This entry reflects:

Accepted Answer

A)  Acceptance of a new partner who invests $70,000 and receives a $20,000 bonus. 
B)  Withdrawal of a partner who pays a $10,000 bonus to each of the other partners. 
C)  Addition of a partner who pays a bonus to each of the other partners. 
D)  Additional investment into the partnership by Tanner and Jackson. 
E)  Withdrawal of $10,000 each by Tanner and Jackson upon the admission of a new partner. 
A)  Acceptance of a new partner who invests $70,000 and receives a $20,000 bonus. 
B)  Withdrawal of a partner who pays a $10,000 bonus to each of the other partners. 
C)  Addition of a partner who pays a bonus to each of the other partners. 
D)  Additional investment into the partnership by Tanner and Jackson. 
E)  Withdrawal of $10,000 each by Tanner and Jackson upon the admission of a new partner. A

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

When partners invest in a partnership,their capital accounts are credited for the amount invested.

Accepted Answer

A) True 
 B)False

Question 6

Groh and Jackson are partners.Groh's capital balance in the partnership is $64,000 and Jackson's capital balance is $61,000.Groh and Jackson have agreed to share equally in income or loss.Groh and Jackson agree to accept Block with a 25% interest.Block will invest $35,000 in the partnership.The capital account balances after admission of Block are:

Accepted Answer

A)  Block $35,000, Groh $64,000, and Jackson $61,000. 
B)  Block $35,000, Groh $66,500, and Jackson $63,500. 
C)  Block $40,000, Groh $64,000, and Jackson $61,000. 
D)  Block $40,000, Groh $61,500, and Jackson $58,500. 
E)  Block $40,000, Groh $66,500, and Jackson $63,500. 
A)  Block $35,000, Groh $64,000, and Jackson $61,000. 
B)  Block $35,000, Groh $66,500, and Jackson $63,500. 
C)  Block $40,000, Groh $64,000, and Jackson $61,000. 
D)  Block $40,000, Groh $61,500, and Jackson $58,500. 
E)  Block $40,000, Groh $66,500, and Jackson $63,500.

Question 7

Discuss the options for the allocation of income and loss among partners,including with and without a partnership agreement.

Accepted Answer

In the absence of a partnership agreemen

Question 8

Baldwin and Tanner formed a partnership.Baldwin's initial capital account balance was $125,000 and Tanner's was $105,000.They agreed to share income and loss as follows: Baldwin 40%,Tanner 60%.Income was $102,000 in year 1 and $150,000 in year 2.Assume they each withdrew $10,000 per year.Calculate the capital balances for Baldwin and Tanner at the end of year 2.

Accepted Answer

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Question 9

Mutual agency means each partner can commit or bind the partnership to any contract within the scope of the partnership business.

Accepted Answer

A) True 
 B)False

Question 10

Durango and Verde formed a partnership with capital contributions of $150,000 and $190,000,respectively.Their partnership agreement called for Durango to receive a $50,000 annual salary allowance.They also agreed to allow each partner a share of income equal to 10% of their initial capital investments.The remaining income or loss is to be divided equally.If the net income for the current year is $120,000,what are Durango's and Verde's respective shares?

Accepted Answer

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Question 11

During the closing process,each partner's withdrawals account is closed to __________________.

Accepted Answer

that partn

Question 12

When a partnership is liquidated,its business is ended.

Accepted Answer

A) True 
 B)False

Question 13

Armstrong withdraws from the FAP Partnership.The remaining partners agree to buy out her share for her capital balance of $35,000.Prepare the journal entry to record the withdrawal from the partnership.

Accepted Answer

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Question 14

Shelby and Mortonson formed a partnership with capital contributions of $300,000 and $400,000,respectively.Their partnership agreement calls for Shelby to receive a $60,000 per year salary.Also,each partner is to receive an interest allowance equal to 10% of a partner's beginning capital investments.The remaining income or loss is to be divided equally.If the net income for the current year is $135,000,then Shelby and Mortonson's respective shares are:

Accepted Answer

A)  $67,500; $67,500 
B)  $92,500; $42,500 
C)  $57,857; $77,143 
D)  $90,000; $40,000 
E)  $35,000; $100,000 
A)  $67,500; $67,500 
B)  $92,500; $42,500 
C)  $57,857; $77,143 
D)  $90,000; $40,000 
E)  $35,000; $100,000

Question 15

Juanita invested $100,000 and Jacque invested $95,000 in a new partnership.They agreed to a $50,000 annual salary allowance to Juanita and a $40,000 annual salary allowance to Jacque.They also agreed to an annual interest allowance of 10% on the partners' beginning-year capital balance,with the balance to be divided equally.Under this agreement,what are the income or loss shares of the partners if the annual partnership income is $102,000?

Accepted Answer

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Question 16

Rodriguez,Sate,and Melton are dissolving their partnership.Their partnership agreement allocates income and losses equally among the partners.The current period's ending capital account balances are Rodriguez,$30,000; Sate,$30,000; and Melton,$(4,000).After all the assets are sold and liabilities are paid,but before any contributions are considered to cover any deficiencies,there is $56,000 in cash to be distributed.Melton pays $4,000 to cover the deficiency in her account.The general journal entry to record the final distribution would be:

Accepted Answer

A)  $$\begin{array} { | c | c | c | } 
\hline \text { Rodriguez Capital } \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots & 30,000 & \
\hline \text { Sate, Capital } \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots & 30,000 & \
\hline \text { Cash } \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots & & 60,000 \
\hline
\end{array}$$ 
B)  $$\begin{array} { | c | c | c | } 
\hline \text { Rodriguez Capital } \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots & 28,000 & \
\hline \text { Sate, Capital } \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots & 28,000 & \
\hline \text { Cash } \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots & & 56,000 \
\hline
\end{array}$$ 
C)  $$\begin{array} { | l | c | c | } 
\hline \text { Rodriguez Capital } \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots & 30,000 & \
\hline \text { Sate, Capital } \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots & 30,000 & \
\hline \text { \quad Melton, Capital } \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots & & 4,000 \
\hline \text { \quad Cash } \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots & & 56,000 \
\hline
\end{array}$$ 
D)  $$\begin{array} { | l | c | c | } 
\hline \text { Cash } \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots  & 56,000 \
\hline \text { Melton, Capital } \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots  & 4,000 \
\hline \text { \quad Rodriguez Capital } \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots& & 30,000  \
\hline \text { \quad Sate, Capital } \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots && 30,000  \
\hline
\end{array}$$ 
E)  $$\begin{array} { | l | c | c | } 
\hline \text { Rodriguez Capital } \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots & 18,667 & \
\hline \text { Sate, Capital } \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots & 18,667& \
\hline \text { Melton, Capital } \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots &  18,666 \
\hline \text { \quad Cash } \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots & & 56,000 \
\hline
\end{array}$$ 
A)  $$\begin{array} { | c | c | c | } 
\hline \text { Rodriguez Capital } \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots & 30,000 & \
\hline \text { Sate, Capital } \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots & 30,000 & \
\hline \text { Cash } \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots & & 60,000 \
\hline
\end{array}$$ 
B)  $$\begin{array} { | c | c | c | } 
\hline \text { Rodriguez Capital } \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots & 28,000 & \
\hline \text { Sate, Capital } \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots & 28,000 & \
\hline \text { Cash } \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots & & 56,000 \
\hline
\end{array}$$ 
C)  $$\begin{array} { | l | c | c | } 
\hline \text { Rodriguez Capital } \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots & 30,000 & \
\hline \text { Sate, Capital } \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots & 30,000 & \
\hline \text { \quad Melton, Capital } \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots & & 4,000 \
\hline \text { \quad Cash } \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots & & 56,000 \
\hline
\end{array}$$ 
D)  $$\begin{array} { | l | c | c | } 
\hline \text { Cash } \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots  & 56,000 \
\hline \text { Melton, Capital } \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots  & 4,000 \
\hline \text { \quad Rodriguez Capital } \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots& & 30,000  \
\hline \text { \quad Sate, Capital } \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots && 30,000  \
\hline
\end{array}$$ 
E)  $$\begin{array} { | l | c | c | } 
\hline \text { Rodriguez Capital } \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots & 18,667 & \
\hline \text { Sate, Capital } \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots & 18,667& \
\hline \text { Melton, Capital } \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots &  18,666 \
\hline \text { \quad Cash } \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots \ldots & & 56,000 \
\hline
\end{array}$$

Question 17

Alberts and Bartel are partners.On October 1,Alberts' capital balance is $75,000 and Bartel's capital balance is $125,000.With the partnership's approval,Bartel sells one-half of his partnership interest to Camero for $70,000.Prepare the journal entry to record this transaction in the partnership records.

Accepted Answer

@#IMG-DLM&_TB6312_00

Question 18

Define the partner return on equity ratio and explain how a specific partner would use this ratio.

Accepted Answer

The partner return on equity ratio is ca

Question 19

During the closing process,partner's capital accounts are _______________ for their share of net income and _________________ for their share of net loss.

Accepted Answer

The answer of During the closing process,partner's capital accounts are...

Question 20

Web Services is organized as a limited partnership,with David White as one of its partners.David's capital account began the year with a balance of $45,000.During the year,David's share of the partnership income was $7,500 and David received $4,000 in distributions from the partnership.What is David's partner return on equity?

Accepted Answer

A)  7.8% 
B)  8.9% 
C)  15.4% 
D)  16.0% 
E)  16.7% 
A)  7.8% 
B)  8.9% 
C)  15.4% 
D)  16.0% 
E)  16.7%

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

A partnership recorded the following journal entry: Cash \ldots\ldots\ldots\ldots\ldots\ldots\ldots\ldots\ldots\ldots 70,000 B. Tanner, Capital \ldots\ldots\ldots 10,000 R. Jackson, Capital \ldots\ldots\ldots 10,000 H. Rivera, Capital \ldots\ldots\ldots 90,000 This entry reflects:

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

When partners invest in a partnership,their capital accounts are credited for the amount invested.

Discuss the options for the allocation of income and loss among partners,including with and without a partnership agreement.

Mutual agency means each partner can commit or bind the partnership to any contract within the scope of the partnership business.

During the closing process,each partner's withdrawals account is closed to __________________.

When a partnership is liquidated,its business is ended.

Armstrong withdraws from the FAP Partnership.The remaining partners agree to buy out her share for her capital balance of $35,000.Prepare the journal entry to record the withdrawal from the partnership.

Define the partner return on equity ratio and explain how a specific partner would use this ratio.

During the closing process,partner's capital accounts are _ for their share of net income and ___ for their share of net loss.

Introducing Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Accounting for Merchandising Operations

Inventories and Cost of Sales

Cash and Internal Controls

Accounts and Notes Receivable

Long-Term Assets

Current Liabilities

Long-Term Liabilities

Corporate Reporting and Analysis

Reporting Cash Flows

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Job Order Costing and Analysis

Process Costing

Activity-Based Costing and Analysis

Cost-Volume-Profit Analysis

Variable Costing and Performance Reporting

Master Budgets and Performance Planning

Flexible Budgets and Standard Costs

Decentralization and Performance Measurement

Relevant Costing for Managerial Decisions

Capital Budgeting and Investment Analysis

Accounting With Special Journals

Time Value of Money

Investments and International Operations

Filters

Exam 28: Accounting for Partnerships

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

A partnership recorded the following journal entry: Cash \ldots\ldots\ldots\ldots\ldots\ldots\ldots\ldots\ldots\ldots 70,000 B. Tanner, Capital \ldots\ldots\ldots 10,000 R. Jackson, Capital \ldots\ldots\ldots 10,000 H. Rivera, Capital \ldots\ldots\ldots 90,000 This entry reflects:

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

When partners invest in a partnership,their capital accounts are credited for the amount invested.

Discuss the options for the allocation of income and loss among partners,including with and without a partnership agreement.

Mutual agency means each partner can commit or bind the partnership to any contract within the scope of the partnership business.

During the closing process,each partner's withdrawals account is closed to __________________.

When a partnership is liquidated,its business is ended.

Armstrong withdraws from the FAP Partnership.The remaining partners agree to buy out her share for her capital balance of $35,000.Prepare the journal entry to record the withdrawal from the partnership.

Define the partner return on equity ratio and explain how a specific partner would use this ratio.

During the closing process,partner's capital accounts are _______________ for their share of net income and _________________ for their share of net loss.

Introducing Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Accounting for Merchandising Operations

Inventories and Cost of Sales

Cash and Internal Controls

Accounts and Notes Receivable

Long-Term Assets

Current Liabilities

Long-Term Liabilities

Corporate Reporting and Analysis

Reporting Cash Flows

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Job Order Costing and Analysis

Process Costing

Activity-Based Costing and Analysis

Cost-Volume-Profit Analysis

Variable Costing and Performance Reporting

Master Budgets and Performance Planning

Flexible Budgets and Standard Costs

Decentralization and Performance Measurement

Relevant Costing for Managerial Decisions

Capital Budgeting and Investment Analysis

Accounting With Special Journals

Time Value of Money

Investments and International Operations

Filters

During the closing process,partner's capital accounts are _ for their share of net income and ___ for their share of net loss.