Exam 15: Partnerships: Formation,operation,and Changes in Membership

In the JK partnership,Jacob's capital is $140,000,and Katy's is $40,000.They share income in a 3:2 ratio,respectively.They decide to admit Erin to the partnership.Each of the following questions is independent of the others. -Refer to the information provided above.Erin directly purchases a one-fifth interest by paying Jacob $33,000 and Katy $9,000.The land account is increased for its implied increase in value before Erin is admitted.By what amount is the land account increased?

The terms of a partnership agreement provide that one of the partners is to receive a salary allowance of $20,000 plus a bonus of 10 percent of income after deduction of the bonus and the salary allowance.If income is $130,000,the bonus should be:

When a new partner is admitted into a partnership and the new partner receives a capital credit less than the tangible assets contributed,which of the following explains the difference? I.The new partner's goodwill has been recognized. II.The old partners received a bonus from the new partner.

In the JK partnership,Jacob's capital is $140,000,and Katy's is $40,000.They share income in a 3:2 ratio,respectively.They decide to admit Erin to the partnership.Each of the following questions is independent of the others. -Refer to the information provided above.Jacob and Katy agree that some of the inventory is obsolete.The inventory account is decreased before Erin is admitted.Erin invests $38,000 for a one-fifth interest.What are the capital balances of Jacob and Katy after Erin is admitted into the partnership?

In the JK partnership,Jacob's capital is $140,000,and Katy's is $40,000.They share income in a 3:2 ratio,respectively.They decide to admit Erin to the partnership.Each of the following questions is independent of the others. -Refer to the information provided above.What amount will Erin have to invest to give her a one-fourth interest in the capital of the partnership if no goodwill or bonus is recorded?

A partnership is a(n): I.accounting entity. II.taxable entity.

In the JK partnership,Jacob's capital is $140,000,and Katy's is $40,000.They share income in a 3:2 ratio,respectively.They decide to admit Erin to the partnership.Each of the following questions is independent of the others. -Refer to the information provided above.Assume that Erin invests $40,000 for a one-fifth interest.Goodwill is to be recorded.The journal entry to record Erin's admission into the partnership will include:

When a partner retires from a partnership and the retiring partner is paid more than the capital balance in her account,which of the following explains the difference? I.The retiring partner is receiving a bonus from the other partners. II.The retiring partner's goodwill is being recognized.

The PQ partnership has the following plan for the distribution of partnership net income (loss): Required: Calculate the distribution of partnership net income (loss)for each independent situation below (for each situation,assume the average capital balance of P is $140,000 and of Q is $240,000). 1.Partnership net income is $360,000. 2.Partnership net income is $240,000. 3.Partnership net loss is $40,000.

-Refer to the above information.Which statement below is correct if a new partner receives a bonus upon contributing assets into the partnership?

Which of the following statements best describes limited partnerships?

In the JK partnership,Jacob's capital is $140,000,and Katy's is $40,000.They share income in a 3:2 ratio,respectively.They decide to admit Erin to the partnership.Each of the following questions is independent of the others. -Refer to the information provided above.Jacob and Katy agree that some of the inventory is obsolete.The inventory account is decreased before Erin is admitted.Erin invests $38,000 for a one-fifth interest.What is the amount of inventory written down?

In the JAW partnership,Jane's capital is $100,000,Anne's is $80,000,and William's is $75,000.They share income in a 3:2:1 ratio,respectively.William is retiring from the partnership. Required: Prepare journal entries to record William's withdrawal according to each of the following independent assumptions: a)William is paid $80,000,and no goodwill is recorded. b)William is paid $85,000,and only his share of the goodwill is recorded. c)William is paid $78,000,and all implied goodwill is recorded.

The DEF partnership reported net income of $130,000 for the year ended December 31,20X8.According to the partnership agreement,partnership profits and losses are to be distributed as follows: How should partnership net income for 20X8 be allocated to D,E,and F?

The APB partnership agreement specifies that partnership net income be allocated as follows: Average capital balances for the current year were $50,000 for A,$30,000 for P,and $20,000 for B. -Refer to the information given.Assuming a current year net income of $150,000,what amount should be allocated to each partner?

In the LMN partnership,Lynn's capital is $60,000,Marty's is $80,000,and Nancy's is $70,000.They share income in a 4:3:3 ratio,respectively.Nancy is retiring from the partnership.Each of the following questions is independent of the others. -Refer to the information above.Nancy is paid $84,000,and no goodwill is recorded.In the journal entry to record Nancy's withdrawal:

When the old partners receive a bonus upon admission of a new partner into a partnership,the bonus is allocated to: I.all the partners in their profit and loss sharing ratio. II.the existing partners in their profit and loss sharing ratio.

A joint venture may be organized as a: I.Partnership. II.Corporation. III.Undivided interest.

RD formed a partnership on February 10,20X9.R contributed cash of $150,000,while D contributed inventory with a fair value of $120,000.Due to R's expertise in selling,D agreed that R should have 60 percent of the total capital of the partnership.R and D agreed to recognize goodwill.What is the total capital of the RD partnership and the capital balance of R after the goodwill is recognized?

When a new partner is admitted into a partnership and the old partners' goodwill is recognized,the goodwill is allocated to: I.all the partners in their profit-and-loss-sharing ratio. II.the old partners in their profit and loss sharing ratio.