Question :
71. Groh and Jackson partners. Groh’s capital balance in the partnership : 1256284
71. Groh and Jackson are partners. Groh’s capital balance in the partnership is $64,000 and Jackson’s capital balance is $61,000. Groh and Jackson have agreed to share equally in income or loss. Groh and Jackson agree to accept Block with a 25% interest. Block will invest $35,000 in the partnership. The capital account balances after admission of Block are:
A. Block $35,000, Groh $64,000, and Jackson $61,000.
B. Block $35,000, Groh $66,500, and Jackson $63,500.
C. Block $40,000, Groh $64,000, and Jackson $61,000.
D. Block $40,000, Groh $61,500, and Jackson $58,500.
E. Block $40,000, Groh $66,500, and Jackson $63,500.
72. Tanner, Schmidt, and Hayes are partners with capital account balances of $100,000, $120,000, and $96,000 respectively. They share profits and losses in a 3:4:3 ratio. Schmidt wishes to leave the partnership and will be paid $125,000. What are the remaining capital account balances after Schmidt withdraws?
A. Tanner $95,500; Hayes $95,500.
B. Tanner $102,500; Hayes $98,500.
C. Tanner $100,000; Hayes $96,000.
D. Tanner $97,500; Hayes $93,500.
E. Tanner $100,000; Hayes $91,000.
73. Force and Zabala are partners. Force’s capital balance in the partnership is $98,000 and Zabala ‘s capital balance is $53,000. Force and Zabala have agreed to share equally in income or loss. Force and Zabala agree to accept Burns with a 25% interest. Burns will invest $56,000 in the partnership. The total bonus that is granted to the existing partners equals: A. $6,500.B. $9,125.C. $2,125.D. $4,250.E. $0, because Force and Zabala actually grant a bonus to Burns.
74. Force and Zabala are partners. Force’s capital balance in the partnership is $98,000 and Zabala ‘s capital balance is $53,000. Force and Zabala have agreed to share equally in income or loss. Force and Zabala agree to accept Burns with a 25% interest. Burns will invest $56,000 in the partnership. Which of the following statements is correct?
A. Force’s capital balance after the admission of Burns is $50,875.B. Burns’ capital after admission is $51,750.C. Zabala’s capital after the admission of Burns is $98,000.
D. Burns’ capital after admission is $56,000.E. Force’s capital balance after the admission of Burns is $53,000.
75. Brown and Rubix are partners. Brown’s capital balance in the partnership is $73,000 and Rubix’s capital balance is $62,000. Brown and Rubix have agreed to share equally in income or loss. Brown and Rubix agree to accept Cabela with a 20% interest. Cabela will invest $41,500 in the partnership. The bonus that is granted to Brown and Rubix equals: A. $3,100 each.B. $6,200 each.C. $35,300 in total.D. $41,500 in total.E. $0, because Brown and Rubix actually grant a bonus to Cabela.
76. When a partnership is liquidated, which of the following is not true? A. Noncash assets are converted to cash.B. Any gain or loss on liquidation is allocated to the partners’ capital accounts using the income and loss sharing ratio.C. Liabilities are paid or settled.D. Any remaining cash is distributed to the partners based on their capital balances.E. Any remaining cash is distributed to partners in accordance with the income- and loss-sharing ratio.
77. A capital deficiency means that: A. The partnership has a loss.B. The partnership has more liabilities than assets.C. At least one partner has a debit balance in his/her capital account.D. At least one partner has a credit balance in his/her capital account.E. The partnership has been sold at a loss.
78. When a partner is unable to pay a capital deficiency: A. The partner must take out a loan to cover the deficient balance.B. The deficiency is absorbed by the remaining partners.C. The partnership ends.D. The deficient partner has no personal liability to pay the deficiency.E. The partnership must be liquidated.
79. McCartney, Harris, and Hussin are dissolving their partnership. Their partnership agreement allocates income and losses equally among the partners. The current period’s ending capital account balances are McCartney, $15,000, Harris, $15,000, Hussin, $(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. Hussin pays $2,000 to cover the deficiency in his account. The general journal entry to record the final distribution would be: A.
McCartney, Capital……………………………
15,000
Harris, Capital…………………………………..
15,000
Cash………………………………………..
30,000
B.
McCartney, Capital……………………………
14,000
Harris, Capital…………………………………..
14,000
Cash………………………………………..
28,000
C.
McCartney, Capital……………………………
15,000
Harris, Capital…………………………………..
15,000
Hussin, Capital…………………………
2,000
Cash………………………………………..
28,000
D.
Cash………………………………………………….
15,000
Hussin, Capital…………………………………..
15,000
McCartney, Capital…………………….
2,000
Harris, Capital……………………………
28,000
E.
McCartney, Capital……………………………
9,334
Harris, Capital…………………………………..
9,333
Hussin, Capital………………………………….
9,333
Cash………………………………………..
28,000
80. McCartney, Harris, and Hussin 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 McCartney, $13,000; Harris, $13,000; and Hussin, $(2,000). After all assets are sold and liabilities are paid, there is $24,000 in cash to be distributed. Hussin is unable to pay the deficiency. The journal entry to record the distribution should be: A.
McCartney, Capital……………………………
8,000
Harris, Capital…………………………………..
8,000
Hussin, Capital………………………………….
8,000
Cash………………………………………..
24,000
B.
McCartney, Capital……………………………
12,000
Harris, Capital…………………………………..
12,000
Cash………………………………………..
24,000
C.
McCartney, Capital……………………………
13,000
Harris, Capital…………………………………..
13,000
Hussin, Capital………………………..
2,000
Cash………………………………………..
24,000
D.
Cash…………………………………………………
24,000
Hussin, Capital…………………………………..
2,000
McCartney, Capital……………………
13,000
Harris, Capital…………………………..
13,000
E.
Cash…………………………………………………
24,000
McCartney, Capital……………………
8,000
Harris, Capital…………………………..
8,000
Hussin, Capital…………………………..
8,000
81. Rodriguez, Sate, and Melton are dissolving their partnership. Their partnership agreement allocates income and losses equally among the partners. The current period’s ending capital account balances are Rodriguez, $30,000; Sate, $30,000; and Melton, $(4,000). After all the assets are sold and liabilities are paid, but before any contributions are considered to cover any deficiencies, there is $56,000 in cash to be distributed. Melton pays $4,000 to cover the deficiency in her account. The general journal entry to record the final distribution would be: A.
Rodriguez, Capital………………………………
30,000
Sate, Capital………………………………………
30,000
Cash………………………………………..
60,000
B.
Rodriguez, Capital………………………………
28,000
Sate, Capital………………………………………
28,000
Cash………………………………………..
56,000
C.
Rodriguez, Capital………………………………
30,000
Sate, Capital………………………………………
30,000
Melton, Capital…………………………
4,000
Cash………………………………………..
56,000
D.
Cash…………………………………………………
56,000
Melton, Capital………………………………….
4,000
Rodriguez, Capital……………………
30,000
Sate, Capital……………………………..
30,000
E.
Rodriguez, Capital………………………………
18,667
Sate, Capital………………………………………
18,667
Melton, Capital………………………………….
18,666
Cash………………………………………..
56,000
82. Rodriguez, Sate, and Melton are dissolving their partnership. Their partnership agreement allocates income and losses equally among the partners. The current period’s ending capital account balances are Rodriguez, $32,000; Sate, $28,000; and Melton, $(4,000). After all the assets are sold and liabilities are paid, but before any contributions are considered to cover any deficiencies, there is $56,000 in cash to be distributed. Melton pays $2,000 to cover the deficiency in her account. The final distribution of cash would be as follows:
A. Rodriquez $30,000 and State $26,000.
B. Rodriquez $32,000 and State $26,000.
C. Rodriquez $30,000 and State $28,000.
D. Rodriquez $30,000 and State $27,000.
E. Rodriquez $31,000 and State $27,000.
