Question :
59.Robert Ballard, a sole proprietor, entered into partnership with another : 1169067
59.Robert Ballard, a sole proprietor, entered into partnership with another individual. Ballard’s investment in the partnership included equipment that cost $64,000 when it was purchased. The equipment has a book value of $26,000 and a net agreed-on value of $32,000. In the financial records of the partnership, this equipment and its accumulated depreciation should be recorded at
A. $64,000 and $38,000, respectively.
B. $32,000 and $6,000, respectively.
C. $32,000 and $0, respectively.
D. $26,000 and $0, respectively.
60.When the owner of a sole proprietorship accepts a partner, the assets of the proprietorship
A. must be transferred to the partnership at the values reflected in the financial records of the proprietorship.
B. must be converted to cash and used to pay any debts of the proprietorship, with excess cash available for investment in the new partnership.
C. cannot be invested in the new partnership.
D. may be adjusted to reflect current values before being transferred to the partnership.
61.The general ledger of a partnership will
A. not contain a separate drawing account for each partner.
B. contain one capital account that reflects the total equity of all partners.
C. not contain a capital account or accounts.
D. contain a separate capital account for each partner.
62.Which of the following statements is correct?
A. If partners consider their cash withdrawals to be compensation for the work they do for the partnership, the amounts of the withdrawals should be charged to Salaries Expense.
B. If there is no specific agreement on the division of partnership profits and losses, they are divided equally among the partners.
C. If a salary is allowed to one partner, other partners also must receive a salary allowance.
D. None of these statements are correct.
63.The salary and interest allowances in a partnership profit-sharing agreement can best be described as
A. expenses of the business that are deducted from revenue in the determination of net income.
B. amounts on which each partner will not have to pay income tax.
C. a means of distributing net income in relation to the services provided and the capital invested by each partner after which profits or losses are distributed as specified in the partnership agreement.
D. a legal requirement in order for a partnership to be formed.
64.The entry to record the equal distribution of net income between two partners consists of a debit to
A. Income Summary and a credit to each partner’s capital account.
B. each partner’s capital account and a credit to Cash.
C. Income Summary and a credit to each partner’s drawing account.
D. each partner’s capital account and a credit to Income Summary.
65.The entry to record a partner’s salary allowance consists of a debit to
A. the partner’s capital account and a credit to Cash.
B. Salaries Expense and a credit to the partner’s drawing account.
C. Income Summary and a credit to the partner’s capital account.
D. Income Summary and a credit to the partner’s drawing account.
66.Partnership net income of $33,000 is to be divided between two partners, Elan Chan and Roy Anderson, according to the following arrangement: There will be salary allowances of $20,000 for Chan and $10,000 for Anderson, with the remainder divided equally. How much of the net income will be distributed to Chan and Anderson, respectively?
A. $22,000 and $11,000
B. $21,500 and $11,500
C. $16,500 and $16,500
D. $21,000 and $12,000
67.Partnership net income of $135,000 is to be divided between two partners, Ross Trane and Jane Winder, according to the following arrangement: There will be salary allowances of $40,000 for Trane and $50,000 for Winder, with the remainder divided one-third and two-thirds respectively per their partnership agreement. How much of the net income will be distributed to Trane and Winder, respectively?
A. $45,000 and $90,000
B. $30,000 and 15,000
C. $15,000 and $30,000
D. $55,000 and $80,000
68.Partnership net income of $75,000 is to be divided between two partners, Bob Garcia and Jerry McKernan, according to the following arrangement: There will be salary allowances of $30,000 for Garcia and $20,000 for McKernan, with the remainder divided equally. How much of the net income will be distributed to Garcia and McKernan, respectively?
A. $40,000 and $30,000
B. $42,500 and $32,500
C. $45,000 and $35,000
D. $67,500 and $57,500
