1. Partners All, Bak, and Coe share profits and losses 50:30:20, respectively. The balance sheet at April...

Question:

1. Partners All, Bak, and Coe share profits and losses 50:30:20, respectively. The balance sheet at April 30, 2016, follows:
1. Partners All, Bak, and Coe share profits and losses

The assets and liabilities are recorded and presented at their respective fair values. Jon is to be admitted as a new partner with a 20 percent capital interest and a 20 percent share of profits and losses in exchange for a cash contribution. No goodwill or bonus is to be recorded. How much cash should Jon contribute?
a $60,000
b $72,000
c $75,000
d $80,000
2. Elt and Don are partners who share profits and losses in the ratio of 7:3, respectively. On November 5, 2016, their respective capital accounts were as follows:
Elt $70,000
Don 60,000
$130,000
On that date they agreed to admit Kra as a partner with a one-third interest in the capital and profits and losses upon his investment of $50,000. The new partnership will begin with a total capital of $180,000. Immediately after Kra's admission, what are the capital balances of Elt, Don, and Kra, respectively?
a $60,000, $60,000, $60,000
b $63,000, $57,000, $60,000
c $63,333, $56,667, $60,000
d $70,000, $60,000, $50,000
3. Wil desires to purchase a one-fourth capital and profit and loss interest in the partnership of Eli, Geo, and Dic. The three partners agree to sell Wil one-fourth of their respective capital and profit and loss interests in exchange for a total payment of $40,000. The capital accounts and the respective percentage interests in profits and losses immediately before the sale to Wil are as follows:
Eli capital (60%) $80,000
Geo capital (30%) 40,000
Dic capital (10%) 20,000
$140,000
All other assets and liabilities are fairly valued, and implied goodwill is to be recorded prior to the acquisition by Wil. Immediately after Wil's acquisition, what should be the capital balances of Eli, Geo, and Dic, respectively?
a $60,000, $30,000, $15,000
b $69,000, $34,500, $16,500
c $77,000, $38,500, $19,500
d $92,000, $46,000, $22,000
4. The capital accounts of the partnership of New, Sha, and Jac on June 1, 2016, are presented, along with their respective profit and loss ratios:

1. Partners All, Bak, and Coe share profits and losses

On June 1, 2016, Sid was admitted to the partnership when he purchased, for $132,000, a proportionate interest from New and Sha in the net assets and profits of the partnership. As a result of this transaction, Sid acquired a one-fifth interest in the net assets and profits of the firm. Assuming that implied goodwill is not to be recorded, what is the combined gain realized by New and Sha upon the sale of a portion of their interests in the partnership to Sid?
a $0
b $43,200
c $62,400
d $82,000
5. Ker and Pat are partners with capital balances of $60,000 and $20,000, respectively. Profits and losses are divided in the ratio of 60:40. Ker and Pat decide to admit Gra, who invested land with a fair value of $15,000 for a 20 percent capital interest in the partnership. Gra's capital account should be credited for:
a $12,000
b $15,000
c $16,000
d $19,000
6. Dix, a partner in an accounting firm, decided to withdraw from the partnership. Dix's share of the partnership profits and losses was 20 percent. Upon withdrawing from the partnership, he was paid $74,000 in final settlement for his partnership interest. The total of the partners' capital accounts before recognition of partnership goodwill prior to Dix's withdrawal was $210,000. After his withdrawal, the remaining partners' capital accounts, excluding their share of goodwill, totaled $160,000. The total agreed-upon goodwill of the firm was:
a $120,000
b $140,000
c $160,000
d $250,000
7. On June 30, 2016, the balance sheet for the partnership of Wil, Bro, and Low, together with their respective profit and loss ratios, is summarized as follows:

1. Partners All, Bak, and Coe share profits and losses

Wil has decided to retire from the partnership, and by mutual agreement the assets are to be adjusted to their fair value of $360,000 at June 30, 2016. It is agreed that the partnership will pay Wil $102,000 cash for his partnership interest exclusive of his loan, which is to be repaid in full. Goodwill is to be recorded in this transaction, as implied by the excess payment to Wil. After Wil's retirement, what are the capital account balances of Bro and Low, respectively?
a $65,000 and $150,000
b $97,000 and $246,000
c $73,000 and $174,000
d $77,000 and $186,000

Goodwill
Goodwill is an important concept and terminology in accounting which means good reputation. The word goodwill is used at various places in accounting but it is recognized only at the time of a business combination. There are generally two types of...
Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
Partnership
A legal form of business operation between two or more individuals who share management and profits. A Written agreement between two or more individuals who join as partners to form and carry on a for-profit business. Among other things, it states...
Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Advanced Accounting

ISBN: 978-0134472140

13th edition

Authors: Floyd A. Beams, Joseph H. Anthony, Bruce Bettinghaus, Kenneth Smith

Question Posted: