Reference no: EM132592722
Questions -
Q1 - Patty and Paul are partners who share income in the ratio of 3:2. Their capital balances are $90,000 and $130,000, respectively, on January 1. The partnership generated net income of $40,000 for the year. What is Paul's capital balance after closing the revenue and expense accounts to the capital accounts?
a. $120,000
b. $164,000
c. $146,000
d. $160,000
Q2 - Singer and McMann are partners in a business. Singer's original capital was $40,000 and McMann's was $60,000. They agree to salaries of $12,000 and $18,000 for Singer and McMann, respectively, and 10% interest on original capital. If they agree to share the remaining profits and losses in a 3:2 ratio, what will Singer's share of the income (loss) be if the net loss for the year is $10,000?
a. ($6,000)
b. ($12,600)
c. ($10,000)
d. ($14,000)
Q3 - Rex and Kelsey are partners who share income in the ratio of 3:2. Their capital balances are $95,000 and $140,000, respectively, on January 1. The partnership generated net income of $40,000 for the year. What is Rex's capital balance after closing the revenue and expense accounts to the capital accounts?
a. $71,000
b. $111,000
c. $119,000
d. $146,000
Q4 - Soledad and Winston are partners who share income in the ratio of 1:3 and have capital balances of $46,900 and $79,200, respectively, at the time they decide to terminate the partnership. After all noncash assets are sold and all liabilities are paid, there is a cash balance of $65,800. What amount of loss on realization should be allocated to Soledad?
a. $18,090
b. $60,300
c. $7,538
d. $15,075
Q5 - Sandra and Kelsey are forming a partnership. Sandra will invest a piece of equipment with a book value of $6,600 and a fair market value of $15,400. Kelsey will invest a building with a book value of $34,400 and a fair market value of $76,900.
What amount will be recorded to Sandra's capital account?
a. $6,600
b. $15,400
c. $76,900
d. $34,400
Q6 - Jesse and Tim form a partnership by combining the assets of their separate businesses. Jesse contributes accounts receivable with a face amount of $47,000 and equipment with a cost of $178,000 and accumulated depreciation of $96,000. The partners agree that the equipment is to be valued at $67,500, that $4,000 of the accounts receivable are completely worthless and are not to be accepted by the partnership, and that $1,900 is a reasonable allowance for the uncollectibility of the remaining accounts receivable. Tim contributes cash of $21,000 and merchandise inventory of $44,500. The partners agree that the merchandise inventory is to be valued at $48,000.
Journalize the entries to record in the partnership accounts (a) Jesse's investment and (b) Tim's investment.