21) Kate and Joe formed a partnership in 2013. Joe invested $80,000 and Kate invested $50,000. The partnership had $100,000 in income during 2015. There is no agreement as to how income is divided. Kate and Joe's share is:
A) Kate gets $100,000 and Joe gets $50,000.
B) Kate gets $50,000 and Joe gets $100,000.
C) Kate gets $50,000 and Joe gets $50,000.
D) some other division.
22) Partners Brian, Josh, and Chad have capital balances of $8,000, $6,000, and $80,000, respectively. The losses for the year are $10,000. What will Josh's capital balance be if the three partners share profits and losses at a 2:2:6 ratio for Brian, Josh, and Chad, respectively?
A) $4,000 debit balance
B) $1,000 debit balance
C) $2,400 debit balance
D) $4,000 credit balance
23) Partners Brian, Josh, and Chad have average capital balances of $7,000, $3,000, and $90,000, respectively. Net income for the year is $12,000. Salary allowances are $14,000 for Brian and $5,000 for Josh. Chad gets 10% interest on his capital balance with the remainder being divided at a 1:1:2 ratio for Brian, Josh, and Chad, respectively. What is Brian's capital balance after distributing the net income? (Assume no change in capital balances during the year.)
A) $17,000 credit balance
B) $3,000 debit balance
C) $10,000 debit balance
D) $7,000 debit balance
24) Partners Jessica and Jill receive salary allowances of $5,000 and $10,000, respectively. They share income and losses in a 3:1 ratio for Jessica and Jill, respectively. If the partnership suffers a $21,000 loss, by how much would Jessica's capital decrease?
A) $15,750
B) $10,750
C) $16,000
D) $22,000
25) Janie and Larry are partners, with beginning capital balances of $67,000 and $55,000 respectively. During the year, Janie withdrew $12,000 and Larry withdrew $18,000. The year's net income of $42,000 was distributed $15,000 to Janie and $27,000 to Larry. Calculate the ending balances in the capital accounts.
A) Janie, $45,000; Larry, $28,000
B) Janie, $70,000; Larry, $64,000
C) Janie, $82,000; Larry, $82,000
D) Janie, $67,000; Larry, $55,000
26) A cash withdrawal of a partner was recorded the same as paying payroll. This error would cause:
A) the period's net income to be understated.
B) the period's net income to be overstated.
C) the period end assets to be overstated.
D) the period end assets to be understated.
27) A statement of partner's equity is the same as a statement of owner's equity except:
A) there is a capital account for each partner.
B) net income is assigned to one partner.
C) no additional investment by partners is shown on the statement.
D) There is no difference in the statements.
28) Partnerships are not subject to federal income tax.
29) The statement of partners' equity reveals each partner's ownership percentage of the firm's capital.
30) Partners are not required to report their share of partnership earnings on their personal tax return.
