Question : 45. Design Services organized as a limited partnership, with Miko Toori : 1257547

45. Design Services is organized as a limited partnership, with Miko Toori as one of its partners. Miko’s capital account began the year with a balance of $35,000. During the year, Miko’s share of the partnership income was $7,500, and Miko received $4,000 in distributions from the partnership. What is Miko’s partner return on equity? 
A. 10.2%
B. 22.7%
C. 19.5%
D. 20.4%
E. 21.4%

46. The following information is available regarding Grace Smit’s capital account in Enterprise Consulting Group, a general partnership, for a recent year:
 

Beginning of the year balance

$22,000

Share of partnership income

$ 8,500

Withdrawals made during the year

$ 6,000

What is Smit’s partner return on equity during the year in question? 
A. 36.6%
B. 34.7%
C. 10.8%
D. 11.4%
E. 55.7%

47. Partnership accounting does not: 
A. Use a capital account for each partner.
B. Use a withdrawals account for each partner.
C. Allocate net income to each partner according to the partnership agreement.
D. Allocate net loss to each partner according to the partnership agreement.
E. Tax the business entity.

48. Partnership accounting is the same as accounting for: 
A. A sole proprietorship.
B. A corporation.
C. A sole proprietorship, except that separate capital and withdrawal accounts are kept for each partner.
D. An S corporation.
E. A corporation, except that retained earnings is used to keep track of partners’ withdrawals.

49. Partners’ withdrawals of assets are: 
A. Credited to their withdrawals accounts.
B. Debited to their withdrawals accounts.
C. Credited to their retained earnings.
D. Debited to their retained earnings.
E. Debited to their asset accounts.

50. The withdrawals account of each partner is: 
A. Closed to that partner’s capital account with a credit.
B. Closed to that partner’s capital account with a debit.
C. A permanent account that is not closed.
D. Credited with that partner’s share of net income.
E. Debited with that partner’s share of net loss.

51. R. Stetson contributed $14,000 in cash plus office equipment valued at $7,000 to the SJ Partnership. The journal entry to record the transaction for the partnership is: 
A. Debit Cash $14,000; debit Office Equipment $7,000; credit R Stetson, Capital $21,000.
B.  Debit Cash $14,000; debit Office Equipment $7,000; credit SJ Partnership, Capital $21,000
C. Debit SJ Partnership $21,000; credit R. Stetson, Capital $21,000.
D. Debit R. Stetson, Capital $21,000; credit SJ Partnership, Capital $21,000.
E. Debit Cash $14,000; debit Office Equipment $7,000; credit Common Stock $21,000

52. T. Andrews contributed $14,000 in to the T & B Partnership. The journal entry to record the transaction for the partnership is: 
A. Debit Cash $14,000; credit T & B Partnership, Capital $14,000.
B.  Debit Cash $14,000; credit T. Andrews, Capital $14,000
C. Debit T & B Partnership $14,000; credit T. Andrews, Capital $14,000.
D. Debit T. Andrews, Capital $14,000; credit T & B Partnership, Capital $14,000.
E. Debit Cash $14,000; credit Common Stock $14,000

53. Forman and Berry are forming a partnership. Forman will invest a building that currently is being used by another business owned by Forman. The building has a market value of $80,000. Also, the partnership will assume responsibility for a $20,000 note secured by a mortgage on that building. Berry will invest $50,000 cash. For the partnership, the amounts to be recorded for the building and for Forman’s Capital account are: 
A. Building, $80,000 and Forman, Capital, $80,000.
B. Building, $60,000 and Forman, Capital, $60,000.
C. Building, $60,000 and Forman, Capital, $50,000.
D. Building, $80,000 and Forman, Capital, $60,000.
E. Building, $60,000 and Forman, Capital, $80,000.

54. Maxwell and Smart are forming a partnership. Maxwell is investing a building that has a market value of $180,000. However, the building carries a $56,000 mortgage that will be assumed by the partnership. Smart is investing $120,000 cash. The balance of Maxwell’s Capital account will be: 
A. $180,000.
B. $124,000.
C. $56,000.
D. $64,000.
E. $60,000.