1. When a limited liability company is formed,

A. the partnership activities are limited

B. all partners have limited liability

C. some of the partners have limited liability

D. None of the partners has limited liability

2. Use the information below to answer the question that follows.

Sandra and Kelsey are forming a partnership. Sandra will invest a piece of equipment with a book value of $6,700 and a fair market value of $12,900. Kelsey will invest a building with a book value of $30,200 and a fair market value of $51,100.

What amount will be recorded to Kelsey's capital account?

A.$51,100

B.$30,200

C.$12,900

D.$6,700

3. Xavier and Yolanda have original investments of $50,000 and $100,000, respectively, in a partnership. The articles of partnership include the following provisions regarding the division of net income: interest on original investment at 20%; salary allowances of $27,000 and $18,000, respectively; and the remainder to be divided equally. How much of the net income of $81,000 is allocated to Xavier?

A.$37,000

B.$40,000

C.$42,500

D.$42,000

4 . Tucker and Titus are partners who share income in the ratio of 3:1. Their capital balances are $46,100 and $65,600, respectively. The partnership generated net income of $50,000 for the year. What is Tucker's capital balance after closing the revenue and expense accounts to the capital accounts?

A.$100,320

B.$50,160

C.$66,880

D.$83,600

5. Tomas and Saturn are partners who share income in the ratio of 3:1. Their capital balances are $80,000 and $120,000, respectively. The partnership generated net income of $30,000. What is Saturn's capital balance after closing the revenue and expense accounts to the capital accounts?

A.$102,500

B.$120,000

C.$127,500

D.$112,500

6. Lambert invests $11,919 for a 1/3 interest in a partnership in which the other partners have capital totaling $40,926 before admitting Lambert. After distribution of the bonus, what is Lambert's capital?

A.$26,423

B.$3,973

C.$11,919

D.$17,615

7. T he Calvin-Dogwood Partnership owns inventory that was purchased for $90,000, has a current replacement cost of $85,900, and is priced to sell for $125,000. At what amount should the inventory be recorded in the accounts of the new partnership if Alexis is to be admitted?

A.$129,100

B.$125,000

C.$90,000

D.$85,900

8. Immediately prior to the admission of Abbott, the Smith-Jones Partnership assets had been adjusted to current market prices and the capital balances of Smith and Jones were $61,700 and $66,800, respectively. If the parties agree that the business is worth $171,300, what is the amount of bonus that should be recognized in the accounts at the admission of Abbott?

A.$42,800

B.$109,600

C.$104,500

D.$21,400

Answer rating: 100% (QA)

1 Some of the partners have limited liability Explanation A l... View the full answer