Question :
11) A partnership admits a new partner. The new partner : 1171096
11) A partnership admits a new partner. The new partner invests $70,000 in the business and receives a credit of $90,000 to his capital account. The difference of $20,000 is called a(n):
A) admission fee.
B) partnership expense.
C) bonus.
D) illegal activity.
12) When a partner withdraws, the partnership may have an audit to adjust the assets to their:
A) historic cost.
B) depreciated value.
C) fair market value.
D) book value.
13) Cory, Brooke, and Amy share profits and losses in a 2:1:1 ratio, respectively, in their partnership. The assets are to be reduced $10,000 in value when Brooke wishes to leave the partnership. If each partner had a capital balance of $30,000 before Brooke’s notification of withdrawal, what amount should Brooke be allowed to withdraw from the partnership?
A) $25,000
B) $27,500
C) $26,250
D) $33,000
14) Tim and Bev are partners who share profits and losses in the ratio of 6:4 for Tim and Bev, respectively. Their capital balances are $45,000 and $25,000, respectively. If Jenny is admitted to the partnership for $25,000 for a one-fourth interest, her capital balance will be:
A) $26,667.
B) $20,000.
C) $25,000.
D) $23,750.
15) Allan and Rick are partners who share profits and losses in the ratio of 3:2 for Allan and Rick, respectively. They have capital balances of $35,000 and $40,000, respectively. If Tammy invests $30,000 for one-third interest, Tammy’s capital balance will be:
A) $35,000.
B) $23,750.
C) $31,667.
D) $21,667.
16) Nathan invests $2,000 for 10% interest in a partnership that has total capital of $17,000 after admitting Nathan. Which of the following is true?
A) Nathan’s capital is $1,700.
B) The original partners received a bonus of $200.
C) Nathan received a bonus of $300.
D) The original partners’ capital in the business was $19,000 before admitting Nathan.
17) Jane invests $5,000 for a one-fourth interest in a partnership in which the other partners have capital totaling $20,000 before admitting Jane. After distribution of the bonus, Jane’s capital is:
A) $4,000.
B) $6,000.
C) $8,000.
D) $6,250.
18) Bill pays Steve $12,000 for his $9,000 interest in a partnership. On the partnership books:
A) Bill will have capital of $9,000.
B) Bill will have capital of $12,000.
C) Bill will have capital of $4,000.
D) None of these answers is correct.
19) Mindy and Heather are partners who have agreed to allow Carol to purchase Heather’s share for a direct payment of $30,000 to Heather. Mindy and Heather’s previous capital balances were $10,000 and $15,000, respectively. What will be the amount in Carol’s capital account?
A) $15,000
B) $10,000
C) $30,000
D) Some other number
20) Track and Smith are partners sharing profits and losses in a 3:2 ratio for Track and Smith, respectively. Their capital balances are $12,000 and $18,000, respectively. The partners agree to admit Don for $8,000 for a 30% interest in the partnership. Smith’s capital balance after admitting Don is:
A) $12,000.
B) $19,200.
C) $16,640.
D) $10,000.
