Question :
14) Allan and Rick partners who share profits and losses : 1177214
14) Allan and Rick are partners who share profits and losses in the ratio of 3:2. They have capital balances of $40,000 and $30,000, respectively. If Tammy invests $25,000 for one-third interest, Tammy’s capital balance will be:
A) $25,000.
B) $23,750.
C) $31,667.
D) $21,667.
15) Nathan invests $2,000 for 10% interest in a partnership that has total capital of $15,000 after admitting Nathan. Which of the following is true?
A) Nathan’s capital is $2,000.
B) The original partners received a bonus of $500.
C) Nathan received a bonus of $500.
D) The original partners’ capital in the business was $13,500 before admitting Nathan.
16) Jane invests $8,000 for a one-fourth interest in a partnership in which the other partners have capital totaling $16,000 before admitting Jane. After distribution of the bonus, Jane’s capital is:
A) $4,000.
B) $6,000.
C) $8,000.
D) $10,000.
17) Bill pays Steve $9,000 for his $7,000 interest in a partnership. On the partnership books:
A) Bill will have capital of $9,000.
B) Bill will have capital of $7,000.
C) Bill will have capital of $8,000.
D) None of these answers are correct.
18) Mindy and Heather are partners who have agreed to allow Carol to purchase Heather’s share for a direct payment of $20,000 to Heather. Mindy and Heather’s previous capital balances were $8,000 and $12,000, respectively. What will be the amount in Carol’s capital account?
A) $20,000
B) $8,000
C) $12,000
D) some other number
19) Track and Smith are partners sharing profits and losses in a 3:2 ratio. Their capital balances are $10,000 and $20,000, respectively. The partners agree to admit Don for $10,000 for a 30% interest in the partnership. Smith’s capital balance after admitting Don is:
A) $12,000.
B) $19,200.
C) $20,000.
D) $20,800.
20) When a partnership is dissolved:
A) it is implied that the business cannot form a different ownership structure.
B) it is implied that the business cannot continue with a new group of partners.
C) it is implied that it must be dissolved with any change in partnership structure.
D) it is implied that the business will halt operations.
21) “Limited life” in a partnership agreement means:
A) a partnership is limited in the amount of debt it is liable for in the course of the business.
B) a partnership is limited to the amount of revenue it can earn.
C) a partnership may be dissolved if the location of the business has changed.
D) a partnership may be dissolved as the result of any change in the ownership.
22) Bernstein is brought into the partnership. His capital is equal to his net that he brings to the partnership. He brings assets of $167,000 and liabilities of $27,000. His capital balance will be:
A) $30,000 (cash invested).
B) $167,000 (total of all assets invested).
C) $140,000.
D) $137,000.
23) A partnership can be joined by:
A) investing into the business.
B) purchasing an equity interest in the business.
C) by buying out one of the partners and taking over their interest (by mutual agreement).
D) All of the above.
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