Question :
79.Sam Sung and Mitchell Vaughn partners, and each has a : 1169047
79.Sam Sung and Mitchell Vaughn are partners, and each has a capital balance of $50,000. To gain admission to the partnership, Amanda Scott pays $35,000 directly to Vaughn for one-half of his equity. Scott’s capital account will reflect an equity interest of:
A. $25,000.
B. $35,000.
C. $33,333.
D. $33,750.
80.Valerie Wone and Samantha Wall are partners and together have equity of $150,000 in the partnership. Sarah wishes to become a partner with ¼ interest in the firm. If her investment reflects the cash paid, how much will she contribute to the partnership?
A. $37,500.
B. $50,000.
C. $87,500.
D. $200,000.
81.Finch and Gerhardt are partners. Finch’s capital balance is $100,000 and Gerhardt’s is $140,000. They agreed to share equally in profits and losses. Both partners agree to accept a third investor, Harrison as a new partner with a 25% interest in the partnership. Harrison intends to invest $90,000 in cash. The bonus that is granted to Finch and Gerhardt equals:
A. $3,750 each.
B. $5,000 each.
C. $10,000 each.
D. $15,500 each.
82.If an individual invests more cash for an interest in an existing partnership than the book value of his or her interests, an entry is made to debit
A. Cash and credit the capital account of each existing partner.
B. Cash and credit the drawing account of each existing partner.
C. Cash and credit the Income Summary account for the excess.
D. each existing partner’s capital account and credit Cash.
83.A partnership recorded the following journal entry: This entry reflects:
A. Acceptance of a new partner who invests $50,000 and receives a $20,000 bonus.
B. Sale of a partner’s equity interest who shares the excess received of $10,000 with the other partners.
C. Additional investments by B & S Holmes.
D. Distribution of $10,000 each to B & S Holmes upon admission of new partner.
84.Winchester, Wesson & Smith are dissolving their partnership. Their agreement allocates profits and losses 40:30:30 respectively. The ending capital balances are Winchester $45,000; Wesson $25,000 and Smith $13,000. After all assets are liquidated and liabilities paid, there is $12,000 in cash to be distributed. Smith’s share of the excess cash is
A. $3,600.
B. $3,900.
C. $4,000.
D. $4,800.
85.Which of the following statements is correct?
A. If a new partner invests cash in an existing partnership and a bonus is given to a new partner, the old partners’ capital accounts increase.
B. When a new partner is admitted to an existing partnership upon an investment of cash, the new partner’s capital account may appropriately be debited for an amount other than the amount of cash invested.
C. The partnership agreement should include steps to follow if a partner withdraws from the partnership.
D. When a new partner is admitted to an existing partnership upon an investment of cash, the new partner’s capital account will always equal the amount of cash the new partner invested.
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