Reference no: EM132318934
Question
1. David, Chris and John formed a partnership on July? 31, 2019. They decided to share profits? equally, but inserted a clause in the partnership agreement where any losses would be allocated in the ratio of? 5:2:3, respectively. For the year ended December? 31, 2019, the firm earned a net income of? $50,000. However, for the year ended December? 31, 2020, the firm incurred a loss of? $60,000. Assuming that John had an initial capital contribution of? $43,000 and made no? withdrawals, what is the balance of? John's Capital account as of December? 31, 2020?? (Assume that none of the partners made any further contributions to their capital accounts. Do not round any percentage calculations. Round all monetary calculations to the nearest? dollar.)
A.$59,667
B.$43,000
C.$44,333
D.$41,667
Nancy and Betty enter into a partnership agreement where they decide to share profits according to the following? rules:
?(a) Nancy and Betty will receive salaries of $1,200 and $14,500 respectively as the first allocation.
?(b) The next allocation is based on 10?% of each? partner's capital balances.
?(c) Any remaining profit or loss is to be allocated completely to Betty.
2. The? partnership's net income for the first year is $40,000. Nancy's capital balance is $86,000 and? Betty's capital balance is $9,000 at the end of the year. Calculate the share of? profit/loss to be allocated to Betty.
A.$8,900
B.$950
C.$30,200
D.$ 9,800
3. Bill and Bob share profits of their partnership in the ratio of? 6:1 respectively. If the net income of the firm is?$29,000, calculate? Bill's share of net income.? (Do not round any intermediate? calculations.)
A.$20,714
B.$29,000
C.$24,857
D.$4,143
4. Floyd and Merriam start a partnership business on June? 12, 2019. Their capital account balances as of December? 31, 2020 stood as? follows:
Floyd $46,000
Merriam $20 ,000
They agreed to admit Ramelow into the business for a one-fifth interest in the new partnership. Ramelow contributes $32,000 cash in exchange for the partnership interest. Assume that Floyd and Merriam shared profits and ratio before the admission of Ramelow. Which of the following is the correct journal entry to record the above? admission?
losses in a 3?:1
A. Cash 32,000
? Ramelow, Capital 32,000
B. Cash 32,000
? Merriam, Capital 12,400
? Floyd, Capital 19,600
C. ?Merriam, Capital 19,600
?Floyd, Capital 12,400
? Ramelow, Capital 32,000
D. Cash 32,000
? Floyd, Capital 9,300
? Merriam, Capital 3,100
? Ramelow, Capital 19,600
5. Liquidation in a partnership refers to? ________.
A.increasing the investment in highly liquid assets
B.the admission or withdrawal of a partner that dissolves the partnership
C.shutting down the business by selling its assets and paying its liabilities
D.purchase of another partnership firm which is operating in the same business