75.
Wright, Bell, and Edison are partners and share income in a 2:5:3 ratio. The partnership’s
capital balances are as follows: Wright, $33,000, Bell $27,000 and Edison $40,000. Edison
decides to withdraw from the partnership, and the partners agree not to revalue the assets
upon Edison’s retirement. The journal entry to record Edison’s June 1 withdrawal from the
partnership if Edison is paid $40,000 for his equity is:
76.
Hewlett and Martin are partners. Hewlett’s capital balance in the partnership is $64,000,
and Martin’s capital balance $67,000. Hewlett and Martin have agreed to share equally in
income or loss. The existing partners agree to accept Black with a 20% interest. Black will
invest $35,000 in the partnership. The bonus that is granted to Hewlett and Martin equals:
77.
Hewlett and Martin are partners. Hewlett’s capital balance in the partnership is $64,000,
and Martin’s capital balance $61,000. Hewlett and Martin have agreed to share equally in
income or loss. Hewlett and Martin agree to accept Black with a 25% interest. Black will
invest $35,000 in the partnership. The bonus that is granted to Black equals:
78.
Masters, Hardy, and Rowen are dissolving their partnership. Their partnership agreement
allocates income and losses equally among the partners. The current period’s ending
capital account balances are Masters, $15,000; Hardy, $15,000; Rowen, $(2,000). After all
the assets are sold and liabilities are paid, but before any contributions to cover any
deficiencies, there is $28,000 in cash to be distributed. Rowen pays $2,000 to cover the
deficiency in his account. The general journal entry to record the final distribution would
be:
79.
Masters, Hardy, and Rowen are dissolving their partnership. Their partnership agreement
allocates income and losses equally among the partners. The current period’s ending
capital account balances are Masters, $15,000; Hardy, $15,000; Rowen, $30,000. After all
the assets are sold and liabilities are paid, but before any contributions to cover any
deficiencies, there is $54,000 in cash to be distributed. The general journal entry to record
the final distribution would be:
80.
When a partnership is liquidated:
81.
A capital deficiency means that:
82.
When a partner is unable to pay a capital deficiency:
83.
Henry, Luther, and Gage are dissolving their partnership. Their partnership agreement
allocates each partner 1/3 of all income and losses. The current period’s ending capital
account balances are Henry, $45,000; Luther, $37,000; and Gage, $(5,000). After all assets
are sold and liabilities are paid, there is $77,000 in cash to be distributed. Gage is unable
to pay the deficiency. The journal entry to record the distribution should be:
84.
Henry, Luther, and Gage are dissolving their partnership. Their partnership agreement
allocates each partner 1/3 of all income and losses. The current period’s ending capital
account balances are Henry, $45,000; Luther, $37,000; and Gage, $(5,000). After all assets
are sold and liabilities are paid, there is $77,000 in cash to be distributed. Gage is unable
to pay the deficiency. What amount of cash will Gage receive upon liquidation?
85.
Fontaine and Monroe are forming a partnership. Fontaine invests a building that has a
market value of $250,000; the partnership assumes responsibility for a $75,000 note
secured by a mortgage on the property. Monroe invests $100,000 in cash and equipment
that has a market value of $55,000. For the partnership, the amounts recorded for the
building and for Fontaine’s Capital account are:
86.
Fontaine and Monroe are forming a partnership. Fontaine invests a building that has a
market value of $250,000; the partnership assumes responsibility for a $75,000 note
secured by a mortgage on the property. Monroe invests $100,000 in cash and equipment
that has a market value of $55,000. For the partnership, the amounts recorded for
Fontaine’s Capital account and for Monroe’s Capital account are:
87.
Fontaine and Monroe are forming a partnership. Fontaine invests a building that has a
market value of $250,000; the partnership assumes responsibility for a $75,000 note
secured by a mortgage on the property. Monroe invests $100,000 in cash and equipment
that has a market value of $55,000. For the partnership, the amounts recorded for total
assets and for total capital account are:
88.
Cox, North, and Lee form a partnership. Cox contributes $180,000, North contributes
$150,000, and Lee contributes $270,000. Their partnership agreement calls for the income
or loss division to be based on the ratio of capital invested. If the partnership reports
income of $150,000 for its first year, what amount of income is credited to Cox’s capital
account?
89.
Cox, North, and Lee form a partnership. Cox contributes $180,000, North contributes
$150,000, and Lee contributes $270,000. Their partnership agreement calls for the income
or loss division to be based on the ratio of capital invested. If the partnership reports
income of $150,000 for its first year, what amount of income is credited to Lee’s capital
account?
90.
Cox, North, and Lee form a partnership. Cox contributes $180,000, North contributes
$150,000, and Lee contributes $270,000. Their partnership agreement calls for a 5%
interest allowance on the partner’s capital balances with the remaining income or loss to
be allocated equally. If the partnership reports income of $150,000 for its first year, what
amount of income is credited to North’s capital account?
91.
Cox, North, and Lee form a partnership. Cox contributes $180,000, North contributes
$150,000, and Lee contributes $270,000. Their partnership agreement calls for a 5%
interest allowance on the partner’s capital balances with the remaining income or loss to
be allocated equally. If the partnership reports income of $174,000 for its first year, what
amount of income is credited to Lee’s capital account?
92.
Mace and Bowen are partners and share equally in income or loss. Mace’s current capital
balance is $135,000 and Bowen’s is $120,000. Mace and Bowen agree to accept Kent with
a 30% interest in the partnership. Kent invests $115,000 in the partnership. The amount
credited to Kent’s capital account is:
93.
Mace and Bowen are partners and share equally in income or loss. Mace’s current capital
balance is $135,000 and Bowen’s is $120,000. Mace and Bowen agree to accept Kent with
a 30% interest in the partnership. Kent invests $115,000 in the partnership. The balances
in Mace’s and Bowen’s capital accounts after admission of the new partner equal:
94.
Peters and Chong are partners and share equally in income or loss. Peters’ current capital
balance is $140,000 and Chong’s is $130,000. Peters and Chong agree to accept Aaron
with a 30% interest in the partnership. Aaron invests $98,000 in the partnership. The
balances in Peters’s and Chong’s capital accounts after admission of the new partner
equal:
95.
Peters and Chong are partners and share equally in income or loss. Peters’ current capital
balance is $140,000 and Chong’s is $130,000. Peters and Chong agree to accept Aaron
with a 30% interest in the partnership. Aaron invests $98,000 in the partnership. The
amount credited to Aaron’s capital account is:
96.
Peters, Chong, and Aaron are dissolving their partnership. Their partnership agreement
allocates each partner an equal share of all income and losses. The current period’s
ending capital account balances are Peters, $54,000; Chong, $42,000; and Aaron, $(2,000).
After all assets are sold and liabilities are paid, there is $94,000 in cash to be distributed.
Aaron is unable to pay the deficiency. The journal entry to record the distribution should
be: