Reference no: EM133028616

Questions -

Q1. Statement 1: Forming a partnership requires two or more people agreeing to be partners contributing all of their personal properties. Statement 2: Oral agreements of partners are not allowed.

Both statements are true.

Statement 2 is true.

Both statements are false.

Statement 1 is true.

Q2. What do you call the type of arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the arrangement?

Joint entry

Joint operation

Joint undertaking

Joint venture

Q3. Mom, Bob and Gag are partners with capital balances of $320,000, $450,000 and $520,000 respectively with profit and loss sharing ratio of 2:3:5 respectively. The entity owes Bob $20,000. Upon liquidation, $390,000 is available for distribution to the partners. How much cash will Mom receive?

78,000

136,000

258,000

320,000

Q4. Gummy, Jennifer, and Bella are partners who decided to terminate their partnership due to misunderstanding. Total assets of the partnership is $480,000 including cash of $30,000. Capital balances of the partners were as follows Gummy $150,000; Jennifer $175,000; Bella $67,500. Unpaid liabilities amounted to $87,500. Assets with a book value of $175,000 were sold for $125,000 and the cash was distributed. The profit or loss ratio is 5:3:2. How much must the remaining assets be sold in order for Jennifer to receive $197,500 after liquidation?

Q5. Blake, Paris, and Myra formed a partnership. Their capital balances showed the following: Blake, Capital - $252,000; Paris, Capital - $126,000; Myra, Capital - $42,000. Their profit and loss ratio are 6:3:1. The partners decide to sell 20% of their interest to Vanya for a total payment of $120,000. Vanya will pay the money directly to the other partners. What amount was the bonus debited or credited in partner Blake's capital account?