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100)
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?
A) $36,000. B) $45,000. C) $64,286. D) $60,000. E) $50,000.
101)
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? (Do not round your
intermediate calculations.)
A) $67,500. B) $54,000. C) $60,000. D) $50,000. E) $45,000.
102)
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?
A) $45,000. B) $61,500. C) $63,500. D) $50,000. E) $47,500.
103)
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?
A) $55,500. B) $61,500. C) $57,000. D) $48,000. E) $58,000.
104)
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:
A) $115,000. B) $92,500. C) $120,000. D) $111,000. E) $119,000.
105)
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:
A) Mace $133,000; Bowen $118,000.
B) Mace $135,000; Bowen $124,000.
C) Mace $137,000; Bowen $122,000.
D) Mace $135,000; Bowen $120,000.
E) Mace $139,000; Bowen $120,000.
106)
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:
A) Peters $140,000; Chong $130,000.
B) Peters $133,800; Chong $123,800.
C) Peters $146,200; Chong $136,200.
D) Peters $145,000; Chong $135,000.
E) Peters $166,027; Chong $156,027.
70
107)
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:
A) $114,533. B) $81,000. C) $110,400. D) $98,000. E) $102,600.
108)
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:
A)
Debit Peters, Capital $54,000; debit Chong, Capital $40,000; credit Cash $94,000.
B)
Debit Peters, Capital $53,000; debit Chong, Capital $41,000; credit Cash $94,000.
C)
Debit Cash $94,000; credit Peters, Capital $47,000; credit Chong, Capital $47,000.
D)
Debit Cash $94,000, debit Aaron, Capital $2,000, credit Peters, Capital $54,000, credit
Chong, Capital $42,000.
E)
Debit Peters, Capital $54,000; debit Chong, Capital $42,000; credit Cash $96,000.
109)
Barber and Atkins are partners in an accounting firm and share net income and loss equally.
Barber's beginning partnership capital balance for the current year is $285,000, and Atkins'
beginning partnership capital balance for the current year is $370,000. The partnership had net
income of $250,000 for the year. Barber withdrew $90,000 during the year and Atkins withdrew
$100,000. What is Barber's ending equity?
A) $320,000 B) $362,500 C) $195,000 D) $445,000 E) $357,500
110)
Barber and Atkins are partners in an accounting firm and share net income and loss equally.
Barber's beginning partnership capital balance for the current year is $285,000, and Atkins'
beginning partnership capital balance for the current year is $370,000. The partnership had net
income of $250,000 for the year. Barber withdrew $90,000 during the year and Atkins withdrew
$100,000. What is Barber's return on equity?
A) 33.8% B) 41.3% C) 36.5% D) 32.7% E) 43.9%
111)
Barber and Atkins are partners in an accounting firm and share net income and loss equally.
Barber's beginning partnership capital balance for the current year is $285,000, and Atkins'
beginning partnership capital balance for the current year is $370,000. The partnership had net
income of $250,000 for the year. Barber withdrew $90,000 during the year and Atkins withdrew
$100,000. What is Atkins's return on equity?
A) 41.3% B) 43.9% C) 36.5% D) 32.7% E) 33.8%
112)
Fellows and Marshall are partners in an accounting firm and share net income and loss equally.
Fellows' beginning partnership capital balance for the current year is $185,000, and Marshall's
beginning partnership capital balance for the current year is $260,000. The partnership had net
income of $350,000 for the year. Fellows withdrew $80,000 during the year and Marshall withdrew
$70,000. What is Marshall's return on equity?
A) 54.3% B) 56.0% C) 60.3% D) 78.7% E) 67.3%
113)
If a company wants to protect its three investors against personal liability risk, which of the
following business forms would not be a suitable option?
A)
Limited liability partnership
B)
S Corporation
C)
Partnership
D)
C Corporation
E)
Limited liability company
114)
Reno contributed $104,000 in cash plus equipment valued at $27,000 to the RD Partnership. The
journal entry to record the transaction for the partnership is:
A)
Debit Cash $104,000; debit Equipment $27,000; credit Common Stock $131,000.
B)
Debit Reno, Capital $131,000; credit RD Partnership, Capital $131,000.
C)
Debit Cash $104,000; debit Equipment $27,000; credit Reno, Capital $131,000.
D)
Debit Cash $104,000; debit Equipment $27,000; credit RD Partnership, Capital $131,000.
E)
Debit RD Partnership, Capital $131,000; credit Reno, Capital $131,000.
115)
Bloom and Plant organize a partnership on January 1. Bloom's initial investment consists of $800
cash, $1,700 equipment and a $500 note payable reflecting a bank loan for the new business.
Plant's initial investment is cash of $2,000. These amounts are the values agreed on by both
partners. The journal entry to record Bloom's investment is:
A)
Debit Cash $800; debit Equipment $1,700; credit Bloom, Capital $2,500.
B)
Debit Cash $800; debit Equipment $1,200; credit Bloom, Capital $2,000.
C)
Debit Cash $800; debit Equipment $1,700; credit Note Payable $500; credit Bloom, Capital
$2,000.
D)
Debit Cash $2,000; credit Bloom, Capital $2,000.
E)
Debit Bloom, Capital $3,000; credit Common Stock $3,000.
116)
Bloom and Plant organize a partnership on January 1. Bloom's initial investment consists of $800
cash, $1,700 equipment and a $500 note payable reflecting a bank loan for the new business.
Plant's initial investment is cash of $2,000. These amounts are the values agreed on by both
partners. The journal entry to record Plant's investment is:
A)
Debit Cash $2,500; credit Note Payable $500; credit Plant, Capital $2,500.
B)
Debit Cash $1,500; debit Note Payable $500; credit Plant, Capital $2,000.
C)
Debit Cash $2,000; credit Note Payable $500, credit Plant, Capital $1,500.
D)
Debit Cash $2,000; credit Plant, Capital $2,000.
E)
Debit Bloom, Capital $2,000; credit Cash $2,000.
117)
Wallace and Simpson formed a partnership with Wallace contributing $60,000 and Simpson
contributing $40,000. Their partnership agreement calls for the income (loss) division to be based
on the ratio of capital investments. The partnership had income of $150,000 for its first year of
operation. When the Income Summary is closed, the journal entry to allocate partner income is:
A)
Debit Wallace, Capital $90,000; debit Simpson, Capital $60,000; credit Cash $150,000.
B)
Debit Cash $150,000; credit Wallace, Capital $90,000; credit Simpson, Capital $60,000.
C)
Debit Income Summary $150,000; credit Wallace, Capital $90,000; credit Simpson, Capital
$60,000.
D)
Debit Wallace, Capital $75,000; debit Simpson, Capital $75,000; credit Income Summary
$150,000.
E)
Debit Income Summary $150,000; credit Wallace, Capital $75,000; credit Simpson, Capital
$75,000.
118)
Wallace and Simpson formed a partnership with Wallace contributing $60,000 and Simpson
contributing $40,000. Their partnership agreement calls for the income (loss) division to be based
on the ratio of capital investments. Wallace sold one-half of his partnership interest to Prince for
$55,000 when his capital balance was $78,000. The partnership would record the admission of
Prince into the partnership as:
A)
Debit Wallace, Capital $30,000; credit Prince, Capital $30,000.
B)
Debit Wallace, Capital $55,000; credit Prince, Capital $55,000.
C)
Debit Prince, Capital $55,000; credit Wallace, Capital $55,000.
D)
Debit Wallace, Capital $39,000; credit Prince, Capital $39,000.
E)
Debit Wallace, Capital $39,000; debit Cash $16,000; credit Prince, Capital $55,000.
119)
Wallace, Simpson, and Prince are partners and share income and losses in a 3:4:3 ratio. The
partnership's capital balances are Wallace, $68,000; Simpson, $90,000; and Prince, $42,000. Royal
is admitted to the partnership on July 1 with a 20% equity and invests $50,000. The partnership
would record the admission of Royal into the partnership as:
A)
Debit Cash $20,000; credit Prince, Capital $20,000.
B)
Debit Cash $50,000; credit Royal, Capital $50,000.
C)
Debit Cash $40,000; debit Wallace, Capital $3,000; debit Simpson, Capital, $4,000; debit
Prince, Capital $3,000; credit Royal, Capital $50,000.
D)
Debit Cash $50,000; credit Simpson, Capital $10,000, credit Royal, Capital $40,000.
E)
Debit Wallace, Capital $15,000; debit Simpson, Capital, $20,000; debit Prince, Capital
$15,000; credit Royal, Capital $50,000.
120)
Caitlin, Chris, and Molly are partners and share income and losses in a 3:4:3 ratio. The
partnership's capital balances are Caitlin, $120,000; Chris, $80,000; and Molly, $100,000. Paul is
admitted to the partnership on July 1 with a 20% equity and invests $160,000. The balance in
Paul's capital account immediately after his admission is:
A) $160,000 B) $300,000 C) $460,000 D) $68,000 E) $92,000
