LEARNING MODULESO CPALE Simulation Level 161. Cash settlements between and among2. When property other than cash is invested ina partnership, at what amount should thenon-cash property be credited to thecontributing partner's capital account?a. fair value at the date of contributionpartners to equalize their initial capitalcredits area. recorded in the partnership booksb. not recorded in the partnership booksc. accounted for as an additional investment to b. contributing partner's original costthe partnership or as withdrawals orinvestments from the partnershipd. a and c3. A partner who is entitled to a share of theprofits from a partnership is known asa. a salaried partnerb. a managing partnerc. an equity partnerd. a limited partner5. An advantage of the partnership as a form ofbusiness organization would bea. partners do not pay income taxes on theirshare in partnership incomec. assessed valuation for property tax purposesd. contributing partner's tax basis4. Which of the following is generally thoughtof as a benefit of partnership?a. limited lifeb. mutual agencyc. unlimited liabilityd. ease of formation6. The legal characteristic of a partnershipwhereby each partner is an agent of thepartnership and can bind the partnership tocontracts within the normal scope of thepartnership business is known asa. agreementb. mutual agencyC. contractd. partnershipb. a partnership is bound by the act of thepartnersc. a partnership is created by mere agreementsof the partnersd. a partnership may be terminated by thedeath or withdrawal of a partner7. Which of the following is not a characteristicof most partnerships?a. limited liabilityb. limited life8. The maximum number of persons who arelegally allowed to operate in a partnership isa.2c. mutual agencyd. ease of formationb. 20C. no limitd. 1009. Mr. Pand Ms. Q formed a partnership andagreed to divide the initial capital equallyeven though Mr. P contributed Pio0,000 andMs. Q contributed P84,000 in identifiableassets. The partners agree that thedifference in the amount of contribution and10. Mr. O and Ms. P formed a partnership andagreed to divide the initial capital equallyeven though Mr. O contributed P10o,000 andMs. P contributed P84,000 in identifiableassets. The partners agree that thedifference in the amount of contribution andthe amount of credit to the partner's capitalshall be treated as compensation for theexpertise that the partner will be bringing tothe partnership. How much is the correctvaluation of O's capital immediately after thepartnership formation?the amount of credit to the partner's capitalshall be treated as a cash settlementbetween the partners. The compound entryto record the partners' contributions includescredit to Q's capital account in the amount ofa. P84,000b. Р92,000C. P100,000d. Pi08,000a. P84,000b. P92,000c. P100,000d. P108,00081

Partnership is an agreement in which 2 or more individuals associate with each other to operate…

1. Cash settlements between and among partners to equalize their initial capital credits are a. recorded in the partnership books b. not recorded in the partnership books c accounted for as an additional investment to the partnership or as withdrawals or investments from the partnership C. d. a and c

1. Cash settlements between and among partners to equalize their initial capital credits are a. recorded in the partnership books b. not recorded in the partnership books c accounted for as an additional investment to the partnership or as withdrawals or investments from the partnership C. d. a and c

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter21: Partnerships

Section: Chapter Questions

Problem 55P

See similar textbooks

Similar questions

TOPIC: LUMPSUM LIDUATION (PARTNERSHIP) SHOW YOUR COMPUTATION, 1. Jack, Jill, Dick and Jane are partners with capitals of P 22,000, P 20,600, P 27,400 and P 18,000 respectively. Jack has a loan balance of P 4,000. Profits and losses are shared 40%; 30%; 20%; 10% by Jack, Jill, Dick and Jane respectively. Assuming assets were sold and liabilities paid and the balance of cash showed P 24,000. Prepare a schedule showing how the P 24,000 will be distributed to the partners. 2. The partnership accounts of Guess, Jag and Levis are shown below as of December 31, 2019. Profits and losses are shared 50%; 30%; and 20%, respectively. Guess, Drawing (debit balance) P (32,000) Levis, Drawing (debit balance) (12,000) Jag, Loan 40,000 Guess, Capital 164,000 Jag, Capital 134,000 Levis, Capital 144,000 Total assets amounted to P 638,000, including cash of P 70,000, and P 200,000 worth of liabilities. On January 2019, the partnership was liquidated, and Jag…
Ethics in Action Edward Seymour is a financial consultant to cornish Inc, Areal estate syndicate, Cornish finances and develops commercial real estate(office buildings) projects. The completed projects are then sold as limited partnership interests to individual investors. The syndicate makes a profit on the sale of these partnership interests. Edward provides financial information for prospective investors in a document called the offering "prospectus" This document discusses the financial and legal details of the limited partnership investment. one of the company's current projects, called JEDI 2, Has the partnership borrowing money from a local bank to build a commercial office building. The inerest rate on the loan is 6.5% for the first four years. After four years. The interest rate jumps to 15% for the remaining 20years of the loan The intrest expense is one of the major costs of this project and significantly affects the number of reenters needed for the project to break even,…
The accounting treatment of capital invested in partnership business will be? a. Debited to cash account b. Credited to cash account c. Debited to profit and loss appropriation account d. Debited to partners' capital account
Capital balances of partners after exhausting their non-cash assets are as follows: A (20%) – (54,000) U (10%) - 20,000 B (10%) – (66,000) R (10%0 – (12,000) I (20%) – 35,000 O (10%) – 10,000 N (20%) – (40,000) _________________ 4. Partners R,I,O and U are personally solvent. How much cash must O contribute to the partnership?
PLEASE ANSWER ALL WITH COMPLETE AND CORRECT WORKING THANKS 1 Record the inıtial distribution of available cash based on safe capital balance. 2 Record the payment of the partnership's liabilities. 3 Record the sale of noncash assets. 4 Record the entry to distribute safe cash payments to the partners. 5 Record the payment of all remaining partnership liabilities. 6 Record the payment of liquidation expenses. 7 Record the entry to distribute remaining cash held by the business to the partners.
A written Partnership Agreement states: Partner A is to contribute capital of $20,000 and devotes full time work to the partnership. Partner B is to contribute capital of $30,000 and devotes half time work to the partnership. Therefore, in what ratio is net income to be divided? Group of answer choices a) 1:2 b) 3:5 c) 2:3 d) 1:1
The withdrawal of capital by a partner from the business of partnership will be: a. Debited to partners' capital account b. Debited to profit and loss appropriation account c. Credited to profit and loss account d. Credited to partners' capital account The amount of drawings taken by each partner will be: a. Debited to partners' current account b. Debited to profit and loss appropriation account c. Credited to partners' current account d. Credited to profit and loss account The closing balances of partners' current account will be: a. X RO 59784 (Dr), Y RO 17825 (Cr), Z RO 37622 (Dr) b. X RO 58748 (Dr), Y RO 16852 (Cr), Z RO 36620 (Dr) c. X RO 58784 (Dr), Y RO 16825 (Cr), Z RO 36622 (Dr) d. X RO 58984 (Dr), Y RO 16925 (Dr), Z RO 36626 (Dr)
Is a true or false question: 1) During a partnership liquidation, if a partner has a debit capital balance in his or her capital account, he or she is responsible for contributing personal assets sufficient to eliminate the deficit. 2) The distribution of cash, as the final step in the process in winding up the affairs of a partnership, is distributed based on the income-sharing ratio.
loan to partner , the debit side will be in the partnership Select one: a. cash b. No entry c. partner loan d. partner capital
The withdrawal of capital by a partner from the business of partnership will be? a. Credited to partners' capital account b. Debited to profit and loss appropriation account c. Debited to partners' capital account d. Credited to profit and loss account
Question 1: For Das to obtain a 1/3 interest in the partnership, how much must his cash investment be? Qeustion 2: How much is the capital of Adee upon partnership formation? PLEASE SHOW THE ANSWERS WITH COMPLETE SOLUTION IN A GOOD ACCOUNTING FORM.
Select for each of the following either "Yes", it is a guaranteed payment or "No", it is not.\\n\\n1. An amount paid to a partner for the performance of services. \\n2. An amount paid each year to the partners as a return on their investment in the partnership. \\n3. An amount paid that is comparable to a salary or interest payment. \\n4. Payments that are generally not deductible. \\n5. Payments that can result in a loss to the entity. \\n\\nb. Complete the statements below regarding the reporting of guaranteed payments on Form 1065 and its various schedules.\\n\\nGuaranteed payments are \\n on Form 1065. These amounts are also shown on \\n as an item that must be allocated to the partners for them to report as ordinary income. Therefore, in the partnership's "book-tax reconciliation" on \\n, the guaranteed payments are added to book income so that the two measures of the partnership's income can be equal.\\n\\nc. Complete the statement below regarding the reporting of guaranteed…