Question : 65.Brown invested $200,000 and Freeman invested $150,000 in a partnership. : 1258258

 

65.Brown invested $200,000 and Freeman invested $150,000 in a partnership. They agreed to an interest allowance on the partners’ beginning-year capital investments at 10%, with the balance to be shared equally. Under this agreement, the shares of the partners when the partnership earns $205,000 in income are:    

A.$102,500 to Brown; $102,500 to Freeman.

B.$117,143 to Brown; $87,857 to Freeman.

C.$122,500 to Brown; $82,500 to Freeman.

D.$105,000 to Brown; $100,000 to Freeman.

E.$112,750 to Brown; $92,250 to Freeman.

66.The partnership agreement for Wilson, Pickett & Nelson, a general partnership, provided that profits be shared between the partners in the ratio of their financial contributions to the partnership. Wilson contributed $100,000, Pickett contributed $50,000 and Nelson contributed $50,000. In the partnership’s first year of operation, it incurred a loss of $110,000. What amount of the partnership’s loss, rounded to the nearest dollar, should be absorbed by Nelson?    

A.$50,000

B.$27,500

C.$36,667

D.$0

E.$40,000

67.Olivia Greer is a partner in Made for You. An analysis of Greer’s capital account indicates that during the most recent year, she withdrew $30,000 from the partnership. Her share of the partnership’s net loss was $16,000 and she made an additional equity contribution of $10,000. Her capital account ended the year at $150,000. What was her capital balance at the beginning of the year?    

A.$154,000

B.$170,000

C.$180,000

D.$186,000

E.$196,000

68.The following information is available on TGR Enterprises, a partnership, for the most recent fiscal year: 

Total partnership capital at beginning of the year$180,000

Partnership net income for the year$150,000

Withdrawals by partners during the year$120,000

Additional investments by partners during the year$60,000

There are three partners in TGR Enterprises: Tracey, Gregory and Rodgers. At the end of the year, the partners’ capital accounts were in the ratio of 2:1:2, respectively. Compute the ending capital balances of the three partners.    

A.Tracey = $108,000; Gregory = $54,000; Rodgers = $108,000.

B.Tracey = $90,000; Gregory = $90,000; Rodgers = $90,000.

C.Tracey = $204,000; Gregory = $102,000; Rodgers = $204,000.

D.Tracey = $84,000; Gregory = $102,000; Rodgers = $84,000.

E.Tracey = $60,000; Gregory = $30,000; Rodgers = $60,000.

69.The following information is available on PDC Enterprises, a partnership, for the most recent fiscal year: 

A.$466,000.

B.$402,000.

C.$416,000.

D.$544,000.

E.$388,000.

70.A partner can withdraw from a partnership by any of the following means except:   

A.Selling his/her interest to another person for cash.

B.Selling his/her interest to another person in exchange for assets.

C.Receiving cash from the partnership in the amount of his/her interest.

D.Receiving assets from the partnership in the amount of his/her interest.

E.Close the business and liquidate the assets under the mutual agency principle.

71.A bonus may be paid in all of the following situations except:   

A.By a new partner when the current value of a partnership is greater than the recorded amounts of equity.

B.By a withdrawing partner to remaining partners if the recorded value of the equity is overstated.

C.To a new partner with exceptional talents.

D.By remaining partners to a withdrawing partner if the recorded equity is understated.

E.By an existing partner to him or herself when in need of personal cash flow.

72.When a partner is added to a partnership:   

A.The previous partnership ends.

B.The underlying business operations end.

C.The underlying business operations must close and then re-open.

D.The partnership must continue.

E.The partnership equity always increases.

73.A partnership recorded the following journal entry: 

B. Founder, Capital10,000

A.Acceptance of a new partner who invests $60,000 and receives a $20,000 bonus.

B.Withdrawal of a partner who pays a $10,000 bonus to each of the other partners.

C.Addition of a partner who pays a bonus to each of the other partners.

D.Additional investment into the partnership by Founder and Aqui.

E.Withdrawal of $10,000 each by Founder and Aqui upon the admission of a new partner.

74.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 sells his interest to Whitney for $45,000 after the other two partners approve Whitney as partner is:    

A.Debit Edison, Capital $45,000; credit Whitney, Capital $45,000.

B.Debit Edison, Capital $40,000; credit Cash $40,000.

C.Debit Edison, Capital $40,000; debit Wright, Capital $2,500; debit Bell, Capital $2,500; credit Whitney, Capital $45,000.

D.Debit Edison, Capital $40,000; credit Whitney, Capital $40,000.

E.Debit Edison, Capital $40,000; debit Cash $5,000; credit Whitney, Capital $45,000.

 

 

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