Reference no: EM132718407

Questions -

Q1) On July 1, three partners, H. Jones, Y. Read and T. Kent, decide to start up a partnership by investing $20 000 each. Record the general journal entry to establish the partnership.

Q2) L. Ong owns a boat rental business with $33 000 in cash and boats with a book value of $120 000. She decides to enter a partnership with B. Cooper, who has only $2 000 cash but also owns lakefront docks and land with a book value of $370 000. After some friendly negotiations, they agree that the fair market value of the boats is $105 000; the docks have a fair market value of $20 000 and the land has a fair market value of $390 000. Record the general journal entry to establish the partnership on July 1.

Q3) On August 1, Joan Taylor and Tom Maid are partners in The Taylor Maid Company. They have capital balances of $30 000 and $20 000 respectively, and have an income ratio of 60% and 40%. Record journal entries for each of the independent situations below about the admission of a new partner:

a) Jim Zucher agrees to purchase half of Taylor's equity for $18 000.

b) Barry Thompson agrees to purchase all of Maid's equity for $17 000.

c) Gary Malley invests $5 000 cash and equipment with a fair market value of $9 000 in the

Q4) On September 1, P. Duke, L. King and P. Prince are partners with an income ratio of 5:3:2 and $70 000, $45 000 and $28 000 in their capital accounts, respectively. They think that K. Knight would be a good fit to join their partnership. Record the entry of Knight under the following assumptions:

a) Knight purchases 30% of King's equity for $20 000.

b) Knight enters the partnership by investing $15 000 cash in the business.

Q5) Mann, Haney and Young are partners. Haney, who has a capital balance of $140 000, has decided to retire. On February 1, Mann offers Haney $137 000 for his equity, and Haney accepts. Record the entry to record Haney's departure.

Q6) Orr, Hamilton and Talbot are partners with capital balances of $50 000, $60 000 and $90 000, respectively. They have an income ratio of 3:4:5. On October 1, Orr decides to leave the partnership. Show the entry to record Orr's departure under the following assumptions:

a) Hamilton and Talbot each pay $30 000 of their personal funds to Orr and receive 50% of his equity

b) Talbot pays $45 000 for all of Orr's equity.

Q7) Haney, Koolen and Wallen are partners with capital balances of $140 000, $100 000 and $90 000 respectively. They share all profits and losses equally. On October 1, the partners have decided to close down the business. They manage to liquidate all of the assets at a gain of $60 000. Show the journal entry to allocate the gain to the partners and the entry to dissolve the business assuming a cash balance of $390,000 after the disposal of the assets.

Q8) Chura, Palmer and Priamo are partners with in a technology consulting business. They have capital balances of $35 000, $25 000 and $12 000 respectively. They have an income ratio of 2:3:5. The partnership has the following assets and liabilities: Cash $20 000; Accounts Receivable $7 000; Computer Equipment $140 000; Accumulated Amortization - Computer Equipment $80 000; Note Payable $15 000. On December 1, the partners decide to liquidate the assets and close the partnership. They manage to collect all of the Accounts Receivable but could get only $10 000 for the computer equipment.

a) Show the entries to record the sale of the assets, collection of accounts receivable, the payment of the liabilities.

b) Show the entry to allocate the loss to the partners.