FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 12: Accounting for Partnerships and Limited Liability Companies

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 1

Essay

Review LaterAdd Note

Review Later

Immediately prior to the process of liquidation,partners Micco,Niccum,and Orwell have capital balances of $70,000,$20,000,and $30,000,respectively.There is a cash balance of $10,000,noncash assets total $160,000,and liabilities total $50,000.The partners share net income and losses in the ratio of 2:2:1.Journalize the entries to record the liquidation outlined below,using Assets as the account title for the noncash assets and Liabilities as the account title for all creditors' claims.

Correct Answer

verified

Show Answer

Question 2

Essay

Review LaterAdd Note

Review Later

Easy Sailing,LLC provides repair services for commercially owned boats and yachts.The firm has five members in the LLC,which did not change between the first year and the second year.During Year 2,the business expanded into three new regions of the country.The following revenue and employee information is provided:​ Required (a)For Year 1 and Year 2,determine the revenue per employee (excluding members). (b)Interpret the trend between the two years.

Correct Answer

verified

11ea8d32_28ba_71c3_b445_ef6cadae1465_TB6239_00

Question 3

Multiple Choice

Review LaterAdd Note

The characteristic of a partnership that gives the authority to any partner to legally bind the partnership and all other partners to business contracts is called

Prior to liquidating their partnership,Samuel and Brian had capital accounts of $60,000 and $240,000,respectively.The partnership assets were sold for $120,000.The partnership had no liabilities.Samuel and Brian share income and losses equally.​Required (a)Determine the amount of Samuel's deficiency. (b)Determine the amount distributed to Brian,assuming Samuel is unable to satisfy the deficiency.

A gain or loss on realization is divided among partners according to their

Gentry,sole proprietor of a hardware business,decides to form a partnership with Noel.Gentry's accounts are as follows:​ Noel agrees to contribute $80,000 for a 20% interest.Journalize the entries to record (a)Gentry's investment and (b)Noel's investment.

An advantage of the partnership form of business is that each partner's potential loss is limited to that partner's investment in the partnership.

Malcolm has a capital balance of $90,000 after adjusting to fair market value.Celeste contributes $45,000 to receive a 25% interest in a new partnership with Malcolm.​Determine the amount and recipient of the partner bonus.​

If there is no written agreement as to the way income will be divided among partners,

When a new partner is admitted to a partnership,all partnership assets should be revised to reflect current values.

In the distribution of income,the net income is less than the salary and interest allowances granted; the remaining balance will be a negative amount that must be divided among the partners as though it were a loss.

Xavier and Yolanda have original investments of $50,000 and $100,000,respectively,in a partnership.The articles of partnership include the following provisions regarding the division of net income: interest on original investment at 10%; salary allowances of $27,000 and $18,000,respectively; and the remaining income equally.How much of the net loss of $6,000 is allocated to Yolanda?

Xavier and Yolanda have original investments of $50,000 and $100,000,respectively,in a partnership.The articles of partnership include the following provisions regarding the division of net income: interest on original investment at 10%; salary allowances of $38,000 and $28,000,respectively; and the remainder to be divided equally.How much of the net income of $77,000 is allocated to Xavier?

Jesse and Tim form a partnership by combining the assets of their separate businesses.Jesse contributes accounts receivable with a face amount of $50,000 and equipment with a cost of $180,000 and accumulated depreciation of $100,000.The partners agree that the equipment is to be valued at $58,000,that $3,500 of the accounts receivable are completely worthless and are not to be accepted by the partnership,and that $2,000 is a reasonable allowance for the uncollectibility of the remaining accounts receivable.Tim contributes cash of $21,000 and merchandise inventory of $44,500.The partners agree that the merchandise inventory is to be valued at $48,000.Journalize the entries to record in the partnership accounts (a)Jesse's investment and (b)Tim's investment.

Prior to liquidating their partnership,Porter and Robert had capital account balances of $160,000 and $100,000,respectively.Prior to liquidation,the partnership had no cash assets other than what was realized from the sale of the partnership assets.These partnership assets were sold for $250,000.The partnership had $10,000 of liabilities.Porter and Robert share income and losses equally.​RequiredDetermine the amount received by Porter as a final distribution from liquidation of the partnership.

Match each statement to the appropriate term (a-h) : -Where changes in partner capital accounts for a period of time are reported

Singer and McMann are partners in a business.Singer's original capital was $40,000 and McMann's was $60,000.They agree to salaries of $12,000 and $18,000 for Singer and McMann,respectively,and 10% interest on original capital.If they agree to share the remaining profits and losses in a 3:2 ratio,what will Singer's share of the income (loss) be if the net loss for the year is $10,000?

Match each statement to the appropriate term (a-h) . -Agreement that is the contract between partners

Which of the following is a disadvantage of a partnership when compared to a corporation?

When a partnership is formed,assets contributed by the partners should be recorded on the partnership books at their