Identify the correct statement/s from the following:I. In absence of partnership agreement, no interest on capital is allowed II. In absence of partnership agreement, 6% interest on partner's loan is allowed O a. Statenment II only correct O b. Statement I only correct O c. Both Statements are correct O d. Both Statements are wrong

Identify the correct statement/s from the following:I. In absence of partnership agreement, no interest on capital is allowed II. In absence of partnership agreement, 6% interest on partner's loan is allowed O a. Statenment II only correct O b. Statement I only correct O c. Both Statements are correct O d. Both Statements are wrong

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter19: Accounting For Partnerships

Section: Chapter Questions

Problem 2MC

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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…
In the ABC partnership (to which D seeks admittance), the capital balances of A, B, and C, who share income in the ratio of 5:3:2, are: A, capital P1,000,000 B, capital 600,000 C, capital 400,000 1.How much is the estimated amount to be invested by D for a 20% interest?
What of the following is NOT a typical term in the contract between GPs and LPs (LPA: limited partnership agreement)? Group of answer choices a. LPA is designed to align the interests of the GP with the limited partners (LPs) using a profit-sharing agreement of private equity. b. At the exit, the LPs receive the capital that was invested in the company and the profits are split. c. The LPs typically receive 20 percent and the GPs 80 percent of the capital gain.
6- The share of loss of partners will appear: a. On the credit side of the partners+IBk- capital account b. On the debit side of the profit and loss appropriation account c. On the credit side of the profit and loss appropriation account d. Neither credit side nor debit side of the profit and loss appropriation account
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…
7. The share of loss of partners will appear: a.On the credit side of the partners+IBk- capital account b.On the debit side of the profit and loss appropriation account c.Neither credit side nor debit side of the profit and loss appropriation account d.On the credit side of the profit and loss appropriation account
Which one of the following is a gain to the partnership firm? a. Interest on loan from bank b. Interest on capital c. Withdrawal of capital d. Interest on drawings
Pass necessary rectifying journal entries for the following omissions committed while preparing Profit and Loss Appropriation Account. You are also required to show your workings clearly. (i) A, B and C were partners sharing profits and losses equally. Their fixed capitals were A Rs. 4,00,000; B Rs. 5,00,000 and C Rs. 6,00,000. The partnership deed provided that interest on partners’ capital will be allowed @ 10% per annum. The same was omitted. (ii) P, Q and R were partners in a firm sharing profits and losses in the ratio of 2 : 2 : 1. Their partnership deed provided that interest on partners’ drawings will be charged @ 18% p.a. Interest on the partners’ drawings was Rs. 1,000, Rs. 500 and Rs. 2,000 respectively. The same was omitted.
The Income Statement of a partnership firm shows Net Income of OMR 75,000. A partner has provided OMR 40,000 loan to the partnership firm at 5% interest.Also, in the agreement it is provided that one of the partners is eligible to get salary of OMR 25,000.How much is the Net Profit of the partnership firm available for appropriation?
The partner's capital accounts in AB partnership before the admission of a new partner are as follows: CAPITAL ACCOUNTS P/L Ratios A, Capital 200,000 60% B, Capital 120,000 40% C, purchases 1/4 of A's capital interest in the partnership. How much is the capital balance of A after the admission of C?
Admission by Investment of Assets Partners Quinsay and Buenaventura have capital balances of P100,000 and P40,000 and share income in a ratio of 4:1, respectively. Rementina is to be admitted into the partnership with a 20% interest in the business. What is the journal entries and computations to record the admission of Rementina for each of the following independent situations: 1. Rementina invested P60,000. Total capital will be P200,000. 2. Rementina purchased the 20% interest by paying Quinsay P22,000 and Buenaventura P11,000. 3. Rementina invested P32,000. Total capital will be P172,000.
Answer the following questions regarding four liquidating distribution scenarios, the partnership also liquidates. If there is no gain or loss or if an amount is zero, enter "0". For each, determine the amount and character of any gain or loss to be recognized by each partner and the basis of each asset (other than cash) received. Assume for all scenarios that the distributions of hot assets are proportionate to the partners (or there are no hot assets). You can use the format in Concept Summary 11.3.