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Exam 12: Accounting for Partnerships and Limited Liability Companies

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Question 71

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Match each statement to the appropriate term (a-h) : -The winding-up process of a partnership

A) Deficiency
B) Realization
C) Proprietorship
D) Partnership
E) Mutual agency
F) Liquidation
G) Income-sharing ratio
H) Statement of partnership equity

I) A) and B)
J) B) and F)

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Question 72

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The capital accounts of Heidi and Moss have balances of $90,000 and $65,000,respectively,on January 1,the beginning of the current fiscal year.On April 10,Heidi invested an additional $8,000.During the year,Heidi and Moss withdrew $40,000 and $32,000,respectively.Revenues were $540,000 and expenses were $420,000 for the year.The articles of partnership make no reference to the division of net income.Required​

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Question 73

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Seth and Rachel have original investments of $50,000 and $100,000,respectively,in a partnership.The articles of partnership include the following provisions regarding the division of net income: interest on original investment at 10%; salary allowances of $27,000 and $18,000,respectively; and the remainder divided equally.How much of the net loss of $16,000 is allocated to Seth?

When a new partner is admitted to a partnership,bonuses attributable to either the old partnership or to the incoming partner may be recognized in accordance with the agreement among the partners.

Franco and Jason share income and losses in a 2:1 ratio after allowing for salaries of $15,000 and $30,000,respectively.If the partnership suffers a $15,000 loss,by how much would Jason's capital account increase?

Match each statement to the appropriate term (a-h) : -Used to divide the excess of allowances over loss when net losses occur

Douglas pays Selena $45,000 for her 30% interest in a partnership with net assets of $125,000.Following this transaction,Douglas's capital account should have a credit balance of

Benson contributed land,inventory,and $22,000 cash to a partnership.The land had a book value of $65,000 and a market value of $111,000.The inventory had a book value of $60,000 and a market value of $58,000.The partnership also assumed a $52,000 note payable owned by Benson that was used originally to purchase the land.​RequiredProvide the journal entry for Benson's contribution to the partnership.​

Dissolution is the term that solely means to liquidate the partnership.

Jackson and Campbell have capital balances of $100,000 and $300,000,respectively.Jackson devotes full time and Campbell devotes one-half time to the business.Determine the division of $150,000 of net income in the ratio of capital balances.​

Details of the division of partnership income should normally be disclosed in the financial statements.

Each partner may withdraw the assets he or she contributed to the partnership at any time.

If a new partner is given a 20% interest in the firm,the new partner will receive a 20% interest in earnings.

Jackson and Campbell have capital balances of $100,000 and $300,000,respectively.Jackson devotes full time and Campbell devotes one-half time to the business.Determine the division of $150,000 of net income in the ratio of time devoted to business.​

When a partner withdraws from the partnership,the partnership dissolves.

Xavier and Yolanda have original investments of $50,000 and $100,000,respectively,in a partnership.The articles of partnership include the following provisions regarding the division of net income: interest on original investment at 20%; salary allowances of $27,000 and $18,000,respectively; and the remainder to be divided equally.How much of the net income of $81,000 is allocated to Xavier?

Match each statement to the appropriate term (a-h) : -A step during liquidation when partnership assets are sold

If the partnership agreement does not otherwise state,partnership income is divided in proportion to the individual partner's capital balance.

Each partner has a separate capital and withdrawal account.

Emmett and Sierra formed a partnership dividing income as follows:​ 1.Annual salary allowance to Emmett of $48,000 2.Interest of 8% on each partner's capital balance on January 1 3.Any remaining net income divided equally​Emmett and Sierra had $25,000 and $140,000,respectively,in their January 1 capital balances.Net income for the year was $200,000.​How much net income should be distributed to Emmett?