Principles of Accounting Volume 1
19th Edition
ISBN: 9781947172685
Author: OpenStax
Publisher: OpenStax College
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Textbook Question
Chapter 15, Problem 6Q
Angela and Agatha are partners in Double A Partners. When they withdraw cash for personal use, how should that be recorded in the accounting records?
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In 2-3 sentences, explain how the treatment of an individual partner in a partner-ship or shareholder in an S corporation highlights the fact that the receipt of cash (money) is not necessarily the same as the receipt of income.
Assess the truth of this statement: One of the rules of debits and credits and account balances for a partnership is that when recording a transaction for a receipt of cash, the cash account is always debited for the amount of cash received.
Group of answer choices
This statement is true.
This statement is false.
There is not enough information to determine whether or not this statement is true.
This statement is not applicable to accounting concepts.
Lewis, Zapata, and Fowler share equally in net income and net losses. After the partnership sells all assets for cash, divides the losses on realization, and pays the liabilities, the balances in the capital accounts are as follows: Lewis, $73,500 Cr.; Zapata, $41,000 Cr.;Fowler, $17,000 Dr.a. What term is applied to the debit balance in Fowler’s capital account?b. What is the amount of cash on hand?c. Journalize the transaction that must take place for Lewis and Zapata to receive cash in the liquidation process equal to their capital account balances.
Chapter 15 Solutions
Principles of Accounting Volume 1
Ch. 15 - A partnership ________. A. has one owner B. can...Ch. 15 - Any assets invested by a particular partner in a...Ch. 15 - Which of the following is a disadvantage of the...Ch. 15 - Mutual agency is defined as: A. a mutual agreement...Ch. 15 - Chani contributes equipment to a partnership that...Ch. 15 - Juan contributes marketable securities to a...Ch. 15 - Which one of the following would not be considered...Ch. 15 - A well written partnership agreement should...Ch. 15 - What type of assets may a partner not contribute...Ch. 15 - How does a newly formed partnership handle the...
Ch. 15 - Thandie and Marco are partners with capital...Ch. 15 - Thandie and Marco are partners with capital...Ch. 15 - Thandie and Marco are partners with capital...Ch. 15 - Thandie and Marco are partners with capital...Ch. 15 - When a partnership dissolves, the first step in...Ch. 15 - When a partnership dissolves, the last step in the...Ch. 15 - Prior to proceeding with the liquidation, the...Ch. 15 - Does a partnership pay income tax?Ch. 15 - Can a partners personal assets in a limited...Ch. 15 - Can a partnership assume liabilities as part of...Ch. 15 - Does each partner have to contribute an equal...Ch. 15 - What types of bases for dividing partnership net...Ch. 15 - Angela and Agatha are partners in Double A...Ch. 15 - On February 3, 2016 Sam Singh invested $90,000...Ch. 15 - Why do partnerships dissolve?Ch. 15 - What are the four steps involved in liquidating a...Ch. 15 - When a partner withdraws from the firm, which...Ch. 15 - What is the first step in a partnership...Ch. 15 - When a partnership liquidates, do partners get...Ch. 15 - Coffee Partners decides to close due to the...Ch. 15 - On May 1, 2017, BJ and Paige formed a partnership....Ch. 15 - The partnership of Chase and Chloe shares profits...Ch. 15 - The partnership of Tasha and Bill shares profits...Ch. 15 - Cheese Partners has decided to close the store. At...Ch. 15 - The partnership of Michelle, Amal, and Maureen has...Ch. 15 - The partnership of Tatum and Brook shares profits...Ch. 15 - Arun and Margot want to admit Tammy as a third...Ch. 15 - When a partnership is liquidated, any gains or...Ch. 15 - The partnership of Magda and Sue shares profits...Ch. 15 - The partnership of Arun, Margot, and Tammy has...Ch. 15 - Match each of the following descriptions with the...Ch. 15 - While sole proprietorships and corporations are...Ch. 15 - A partnership is thriving. The three partners get...
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Similar questions
Why is the receipt of cash so rarely excluded from a taxpayer’s gross income? If an employer gave an employee a gift card to a particular store, should the employee be treated as having received cash for purposes of the income tax? Are there additional facts you might want to know?
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Matthews, Williams, and Shen share equally in net income and net losses. After the partnership sells all assets for cash, divides the losses on realization, and pays the liabilities, the balances in the capital accounts are as follows: Matthews, $28,000 Cr.; Williams, $62,500 Cr.; Shen, $18,000 Dr.
a. What term is applied to the debit balance in Shen’s capital account?
b. What is the amount of cash on hand?
c. Journalize the transaction that must take place for Matthews and Williams to receive cash in the liquidation process equal to their capital account balances.
Liquidating partnerships— capital deficiency
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What is Koothrapali’s capital balance after adjustments but before making any cash investment or withdrawal?
How much cash shall Koothrapali invest (withdraw) to comply with the partnership agreement?
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Bonnie and Clyde jointly own their own home when Clyde defaults on credit card debt. To determine if Clyde is insolvent, how will the home play into the calculation?
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Show the solution in good accounting form.
How much cash must be contributed by each of the partners after they contributed thier properties?
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In preparing the schedule of safe payments, it is assumed that:
a. all partners are solvent
b. All non-cash assets are considered worthless
c. No liquidation expenses will be settled
d. Unpaid liabilities will be settled by the partners own personal property
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When accounts receivables are transferred into a partnership, at what amount should they be recorded? Include a definition of Accounts Receivable in your response.
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Lewis, Zapata, and Fowler share equally in net income and net losses. After the partnership sells all assets for cash, divides the losses on realization, and pays the liabilities, the balances in the capital accounts are as follows: Lewis, $34,000 Cr.; Zapata, $74,800 Cr.; Fowler, $21,800 Dr.
Question Content Area
a. What term is applied to the debit balance in Fowler's capital account?
b. What is the amount of cash on hand?$fill in the blank 28030402ff86fa0_2
Question Content Area
c. Journalize the transaction that must take place for Lewis and Zapata to receive cash in the liquidation process equal to their capital account balances. If an amount box does not require an entry, leave it blank.
blank
- Select -
- Select -
- Select -
- Select -
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Two people want to form a partnership and want to transfer business assets into the partnership. They are afraid of tax issues with the transfer what do you tell them?
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Which of the following may not be treated as a partnership for tax purposes? Arnold and Willis operate a restaurant. Thelma and Louise establish an LLP to operate an accounting practice. Lucy and Desi purchase real estate together as a business. Jennifer and Ben form a corporation to purchase and operate a hardware store. All of the above are partnerships.
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Explain using practical example how a partner with a debit balance on his capital account will be accounted for in a partnership account?
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Ana, Bea, and Cara are partners sharing profits and losses in the ratio of 1:1:2, respectively. They decided to liquidate the business. The assets were sold and liabilities amounting to $20,000 were paid. At this point, the capital balances of the partners are as follows:
Ana
$20,000 credit
Bea
15,000 debit
Cara
30,000 credit
Bea is personally insolvent.
1. How much cash is available for distribution to partners?
2. How much cash is received by Ana and Cara?
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