14 15 16 and decided to liquidate their partnership Prior to the final distribution of cash to the partners. As has a capital Ihas a capital balance of $108,000 Also, cash balance is $150.000. All is NOT able to pay the amount he owes the 11 12 131 10 Al Basel and Ziad are sharing income and loss balance of $30,0001 Basel has a capital balance partnership 14.3.2 ratio respec of $72.000 and 2 Which of the following two journal entries are right to record this liquidation case? OA Basel Capital 12.000 Zad Capital 18,000 30,000 Basel capital 54,000 16.000 Ziad capital Cash 150.000 OB Basel Capital 18,000 Ziad Capital 12.000 All Capital 30.000 Basel capital $4,000 9.000 Ziad capital Cash 150.000 OC Basel Capital 18.000 Ziad Capital 12,000 All Capital 30,000 96.000 Basel capital Ziad capital Cash $4,000 150,000 OD Basel Capital 15,000 Ziad Capital 15,000 All Capital 30.000 Basel capital 57,000 Ziad capital 93,000 Cash All Capital

14 15 16 and decided to liquidate their partnership Prior to the final distribution of cash to the partners. As has a capital Ihas a capital balance of $108,000 Also, cash balance is $150.000. All is NOT able to pay the amount he owes the 11 12 131 10 Al Basel and Ziad are sharing income and loss balance of $30,0001 Basel has a capital balance partnership 14.3.2 ratio respec of $72.000 and 2 Which of the following two journal entries are right to record this liquidation case? OA Basel Capital 12.000 Zad Capital 18,000 30,000 Basel capital 54,000 16.000 Ziad capital Cash 150.000 OB Basel Capital 18,000 Ziad Capital 12.000 All Capital 30.000 Basel capital $4,000 9.000 Ziad capital Cash 150.000 OC Basel Capital 18.000 Ziad Capital 12,000 All Capital 30,000 96.000 Basel capital Ziad capital Cash $4,000 150,000 OD Basel Capital 15,000 Ziad Capital 15,000 All Capital 30.000 Basel capital 57,000 Ziad capital 93,000 Cash All Capital

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter15: Partnership Accounting

Section: Chapter Questions

Problem 1PA: The partnership of Tatum and Brook shares profits and losses in a 60:40 ratio respectively after...

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LO.2 In the current year, Bill Parker (54 Oak Drive, St. Paul, MN 55164) is considering making an investment of 60,000 in Best Choice Partnership. The prospectus provided by Bills financial planner indicates that the partnership investment is not a passive activity and that Bills share of the entitys loss in the current year will likely be 40,000, whereas his share of the partnership loss next year will probably be 25,000. Write a letter to Bill in which you indicate how the losses would be treated for tax purposes in the current year and the following year.
The partnership of Tatum and Brook shares profits and losses in a 60:40 ratio respectively after Tatum receives a 10,000 salary and Brook receives a 15,000 salary. Prepare a schedule showing how the profit and loss should be divided, assuming the profit or loss for the year is: A. $40,000 B. $25,000 C. ($5,000) In addition, show the resulting entries to each partners capital account. Tatums capital account balance is $50,000 and Brooks is $60,000.
The partnership of Tasha and Bill shares profits and losses in a 50:50 ratio, and the partners have capital balances of $45,000 each. Prepare a schedule showing how the bonus should be divided if Ashanti joins the partnership with a $60,000 investment. The partners new agreement will share profit and loss in a 1:3 ratio.
The partnership of Michelle, Amal, and Maureen has done well. The three partners have shared profits and losses in a 1:3 ratio, with capital balances of $60,000 each. Maureen wants to retire and withdraw. Prepare a schedule showing how the cost should be divided if Amal and Michelle decide to pay Maureen $70,000 for retirement of her capital account and the new agreement will share profits and losses 50:50.
Juan contributes marketable securities to a partnership. The book value of the securities is $7,000 and they have a current market value of $10,000. What amount should the partnership record in Juans Capital account due to this contribution? A. $10,000 B. $7,000 C. $3,000 D. none of the above
Arun and Margot want to admit Tammy as a third partner for their partnership. Their capital balances prior to Tammys admission are $50,000 each. Prepare a schedule showing how the bonus should be divided among the three, assuming the profit or loss agreement will be 1:3 once Tammy has been admitted and her contribution is: A. $20,000 B. $80,000 C. $50,000. In addition, show the resulting journal entries to each of the three partners capital accounts.