# ACC FINAL 4

A.

the bonus method.

B.

the equity method.

C.

the goodwill method.

D.

the proportionate method.

E.

the cost method.

the goodwill method.

A.

revalues assets and liabilities and records goodwill to the continuing partner but not to the withdrawing partner.

B.

revalues liabilities but not assets, and no goodwill is recorded.

C.

can recognize goodwill but does not revalue assets and liabilities.

D.

revalues assets but not liabilities, and records goodwill to the continuing partner but not to the withdrawing partner.

E.

revalues assets and liabilities but does not record goodwill.

revalues assets and liabilities but does not record goodwill.

A.

the legal requirements for formation.

B.

unlimited liability for the partners.

C.

the requirement for the partnership to pay income taxes.

D.

the extent of governmental regulation.

E.

the complexity of operations.

unlimited liability for the partners.

A.

single taxation.

B.

ease of raising capital.

C.

mutual agency.

D.

limited liability.

E.

difficulty of formation.

single taxation.

A.

only when the partnership sells its assets and permanently closes its books.

B.

only when a partner leaves the partnership.

C.

at the end of each year, when income is allocated to the partners.

D.

only when a new partner is admitted to the partnership.

E.

when there is any change in the individuals who make up the partnership.

when there is any change in the individuals who make up the partnership.

A.

they must present equal claims to the three partners as individuals.

B.

they must try obtain a payment from the partner with the largest capital account balance.

C.

they cannot seek remuneration from the partners as individuals.

D.

they may seek remuneration from any partner they choose.

E.

they must present their claims to the three partners in the order of the partners’ capital account balances.

they may seek remuneration from any partner they choose.

What was Wasser’s total share of net income for 2012?

A.

$63,000.

B.

$53,000.

C.

$58,000.

D.

$29,000.

E.

$51,000.

$63,000.

What was Nolan’s total share of net income for 2012?

A.

$63,000.

B.

$53,000.

C.

$58,000.

D.

$29,000.

E.

$51,000.

$58,000.

What was Cleary’s total share of net income for 2012?

A.

$63,000.

B.

$53,000.

C.

$58,000.

D.

$29,000.

E.

$51,000.

$29,000.

What was Nolan’s capital balance at the end of 2012?

A.

$200,000.

B.

$224,000.

C.

$238,000.

D.

$246,000.

E.

$254,000.

$246,000.

What was Wasser’s capital balance at the end of 2012?

A.

$150,000.

B.

$160,000.

C.

$165,000.

D.

$213,000.

E.

$201,000.

$201,000.

What was Cleary’s capital balance at the end of 2012?

A.

$100,000.

B.

$117,000.

C.

$119,000.

D.

$129,000.

E.

$153,000.

$117,000.

What was the total capital balance for the partnership at December 31, 2012?

A.

$600,000

B.

$564,000

C.

$535,000

D.

$523,000

E.

$545,000

$564,000

What was the amount of interest attributed to Wasser for 2013?

A.

$17,600

B.

$18,800

C.

$20,100

D.

$17,800

E.

$30,100

$20,100

What was Wasser’s total share of net income for 2013?

A.

$34,420.

B.

$75,540.

C.

$65,540.

D.

$70,040.

E.

$61,420.

$75,540.

What was the remainder portion of net income allocated to Nolan for 2013?

A.

$45,440

B.

$58,040

C.

$70,040

D.

$72,000

E.

$82,040

$45,440

What was Nolan’s total share of net income for 2013?

A.

$34,420.

B.

$75,540.

C.

$65,540.

D.

$70,040.

E.

$61,420.

$70,040.

What was Cleary’s total share of net income for 2013?

A.

$34,420.

B.

$75,540.

C.

$65,540.

D.

$70,040.

E.

$61,420.

$34,420.

What was Nolan’s capital balance at the end of 2013?

A.

$139,420.

B.

$246,000.

C.

$276,540.

D.

$279,440.

E.

$304,040.

$304,040.

What was Wasser’s capital balance at the end of 2013?

A.

$201,000.

B.

$263,520.

C.

$264,540.

D.

$304,040.

E.

$313,780.

$264,540.

What was Cleary’s capital account balance at the end of 2013?

A.

$163,420.

B.

$151,420.

C.

$139,420.

D.

$100,000.

E.

$142,000.

$139,420.

What was the total capital balance for the partnership at December 31, 2013?

A.

$852,000

B.

$780,000

C.

$708,000

D.

$744,000

E.

$594,000

$708,000

What will be the amount of interest attributed to Cleary for 2014?

A.

$15,142

B.

$13,942

C.

$12,942

D.

$14,142

E.

$10,000

$13,942

A.

$900.

B.

$560.

C.

$600.

D.

$590.

E.

$630.

$900.

• On March 1, 2013, when the partnership tax return for 2012 was completed, Jerry’s capital account was credited for his share of 2012 profit of $120,000.

• Jerry withdrew $5,000 quarterly, beginning March 31st.

• On September 1, Jerry’s capital account was credited with a special bonus of $60,000 for business he brought to the partnership.

What amount of interest will be attributed to Jerry for year 2013 that will go toward his profit distribution for the year? (Use a 360-day year for calculations.)

A.

$5,250

B.

$6,000

C.

$6,400

D.

$7,000

E.

$7,200

$6,000

Young, Capital: $143,000

Eaton, Capital: $104,000

Thurman, Capital: $143,000

The Articles of Partnership stipulated that profits and losses be assigned in the following manner:

Young was to be awarded an annual salary of $26,000 with $13,000 salary assigned to Thurman.

Each partner was to be attributed with interest equal to 10% of the capital balance as of the first day of the year.

The remainder was to be assigned on a 5:2:3 basis to Young, Eaton, and Thurman, respectively.

Each partner withdrew $13,000 per year.

Assume that the net loss for the first year of operations was $26,000 with net income of $52,000 in the second year.

What was Young’s total share of net loss for the first year?

A.

$3,900 loss.

B.

$11,700 loss.

C.

$10,400 loss.

D.

$24,700 loss.

E.

$9,100 loss.

$11,700 loss.

Young, Capital: $143,000

Eaton, Capital: $104,000

Thurman, Capital: $143,000

The Articles of Partnership stipulated that profits and losses be assigned in the following manner:

Young was to be awarded an annual salary of $26,000 with $13,000 salary assigned to Thurman.

Each partner was to be attributed with interest equal to 10% of the capital balance as of the first day of the year.

The remainder was to be assigned on a 5:2:3 basis to Young, Eaton, and Thurman, respectively.

Each partner withdrew $13,000 per year.

Assume that the net loss for the first year of operations was $26,000 with net income of $52,000 in the second year.

What was Eaton’s total share of net loss for the first year?

A.

$3,900 loss.

B.

$11,700 loss.

C.

$10,400 loss.

D.

$24,700 loss.

E.

$9,100 loss.

$10,400 loss.

Young, Capital: $143,000

Eaton, Capital: $104,000

Thurman, Capital: $143,000

The Articles of Partnership stipulated that profits and losses be assigned in the following manner:

Young was to be awarded an annual salary of $26,000 with $13,000 salary assigned to Thurman.

Each partner was to be attributed with interest equal to 10% of the capital balance as of the first day of the year.

The remainder was to be assigned on a 5:2:3 basis to Young, Eaton, and Thurman, respectively.

Each partner withdrew $13,000 per year.

Assume that the net loss for the first year of operations was $26,000 with net income of $52,000 in the second year.

What was Thurman’s total share of net loss for the first year?

A.

$3,900 loss.

B.

$11,700 loss.

C.

$10,400 loss.

D.

$24,700 loss.

E.

$9,100 loss.

$3,900 loss.

Young, Capital: $143,000

Eaton, Capital: $104,000

Thurman, Capital: $143,000

Young was to be awarded an annual salary of $26,000 with $13,000 salary assigned to Thurman.

Each partner was to be attributed with interest equal to 10% of the capital balance as of the first day of the year.

The remainder was to be assigned on a 5:2:3 basis to Young, Eaton, and Thurman, respectively.

Each partner withdrew $13,000 per year.

Assume that the net loss for the first year of operations was $26,000 with net income of $52,000 in the second year.

What was the balance in Young’s Capital account at the end of the first year?

A.

$120,900.

B.

$118,300.

C.

$126,100.

D.

$80,600.

E.

$111,500.

$118,300.

Young, Capital: $143,000

Eaton, Capital: $104,000

Thurman, Capital: $143,000

Young was to be awarded an annual salary of $26,000 with $13,000 salary assigned to Thurman.

Each partner was to be attributed with interest equal to 10% of the capital balance as of the first day of the year.

The remainder was to be assigned on a 5:2:3 basis to Young, Eaton, and Thurman, respectively.

Each partner withdrew $13,000 per year.

Assume that the net loss for the first year of operations was $26,000 with net income of $52,000 in the second year.

What was the balance in Eaton’s Capital account at the end of the first year?

A.

$120,900.

B.

$118,300.

C.

$126,100.

D.

$80,600.

E.

$111,500.

$80,600.

Young, Capital: $143,000

Eaton, Capital: $104,000

Thurman, Capital: $143,000

Young was to be awarded an annual salary of $26,000 with $13,000 salary assigned to Thurman.

Each partner was to be attributed with interest equal to 10% of the capital balance as of the first day of the year.

The remainder was to be assigned on a 5:2:3 basis to Young, Eaton, and Thurman, respectively.

Each partner withdrew $13,000 per year.

Assume that the net loss for the first year of operations was $26,000 with net income of $52,000 in the second year.

What was the balance in Thurman’s Capital account at the end of the first year?

A.

$120,900.

B.

$118,300.

C.

$126,100.

D.

$80,600.

E.

$111,500.

$126,100.

Young, Capital: $143,000

Eaton, Capital: $104,000

Thurman, Capital: $143,000

Young was to be awarded an annual salary of $26,000 with $13,000 salary assigned to Thurman.

Each partner was to be attributed with interest equal to 10% of the capital balance as of the first day of the year.

The remainder was to be assigned on a 5:2:3 basis to Young, Eaton, and Thurman, respectively.

Each partner withdrew $13,000 per year.

Assume that the net loss for the first year of operations was $26,000 with net income of $52,000 in the second year.

What was Young’s total share of net income for the second year?

A.

$17,160 income.

B.

$4,160 income.

C.

$19,760 income.

D.

$17,290 income.

E.

$28,080 income.

$28,080 income.

Young, Capital: $143,000

Eaton, Capital: $104,000

Thurman, Capital: $143,000

Young was to be awarded an annual salary of $26,000 with $13,000 salary assigned to Thurman.

Each partner was to be attributed with interest equal to 10% of the capital balance as of the first day of the year.

The remainder was to be assigned on a 5:2:3 basis to Young, Eaton, and Thurman, respectively.

Each partner withdrew $13,000 per year.

Assume that the net loss for the first year of operations was $26,000 with net income of $52,000 in the second year.

What was Eaton’s total share of net income for the second year?

A.

$17,160 income.

B.

$4,160 income.

C.

$19,760 income.

D.

$17,290 income.

E.

$28,080 income.

$4,160 income.

Young, Capital: $143,000

Eaton, Capital: $104,000

Thurman, Capital: $143,000

Young was to be awarded an annual salary of $26,000 with $13,000 salary assigned to Thurman.

Each partner was to be attributed with interest equal to 10% of the capital balance as of the first day of the year.

The remainder was to be assigned on a 5:2:3 basis to Young, Eaton, and Thurman, respectively.

Each partner withdrew $13,000 per year.

Assume that the net loss for the first year of operations was $26,000 with net income of $52,000 in the second year.

What was Thurman’s total share of net income for the second year?

A.

$17,160 income.

B.

$4,160 income.

C.

$19,760 income.

D.

$17,290 income.

E.

$28,080 income.

$19,760 income.

Young, Capital: $143,000

Eaton, Capital: $104,000

Thurman, Capital: $143,000

Young was to be awarded an annual salary of $26,000 with $13,000 salary assigned to Thurman.

Each partner was to be attributed with interest equal to 10% of the capital balance as of the first day of the year.

The remainder was to be assigned on a 5:2:3 basis to Young, Eaton, and Thurman, respectively.

Each partner withdrew $13,000 per year.

Assume that the net loss for the first year of operations was $26,000 with net income of $52,000 in the second year.

What was the balance in Young’s Capital account at the end of the second year?

A.

$133,380.

B.

$84,760.

C.

$105,690.

D.

$132,860.

E.

$71,760.

$133,380.

Young, Capital: $143,000

Eaton, Capital: $104,000

Thurman, Capital: $143,000

Young was to be awarded an annual salary of $26,000 with $13,000 salary assigned to Thurman.

Each partner was to be attributed with interest equal to 10% of the capital balance as of the first day of the year.

The remainder was to be assigned on a 5:2:3 basis to Young, Eaton, and Thurman, respectively.

Each partner withdrew $13,000 per year.

Assume that the net loss for the first year of operations was $26,000 with net income of $52,000 in the second year.

What was the balance in Eaton’s Capital account at the end of the second year?

A.

$133,380.

B.

$84,760.

C.

$105,690.

D.

$132,860.

E.

$71,760.

$71,760.

Young, Capital: $143,000

Eaton, Capital: $104,000

Thurman, Capital: $143,000

Young was to be awarded an annual salary of $26,000 with $13,000 salary assigned to Thurman.

Each partner was to be attributed with interest equal to 10% of the capital balance as of the first day of the year.

The remainder was to be assigned on a 5:2:3 basis to Young, Eaton, and Thurman, respectively.

Each partner withdrew $13,000 per year.

Assume that the net loss for the first year of operations was $26,000 with net income of $52,000 in the second year.

What was the balance in Thurman’s Capital account at the end of the second year?

A.

$133,380.

B.

$84,760.

C.

$105,690.

D.

$132,860.

E.

$71,760.

$132,860.

A.

The partnership itself pays no income taxes.

B.

It is easy to form a partnership.

C.

Any partner can be held personally liable for all debts of the business.

D.

A partnership requires written Articles of Partnership.

E.

Each partner has the power to obligate the partnership for liabilities.

A partnership requires written Articles of Partnership.

A.

General Partnership.

B.

Limited Partnership.

C.

Subchapter S Partnership.

D.

Limited Liability Partnership.

E.

Limited Liability Company.

Subchapter S Partnership.

(I.) Limited Liability Company

(II.) Limited Liability Partnership

(III.) Subchapter S Corporation

A.

II only.

B.

II and III.

C.

I and II.

D.

I and III.

E.

I, II, and III.

I, II, and III.

A.

A new partner must purchase a partnership interest directly from the business.

B.

The right of co-ownership in the business property can be transferred to a new partner without the consent of other existing partners.

C.

The right to participate in management of the business cannot be conveyed without the consent of other existing partners.

D.

The right to share in profits and losses can be sold to a new partner without the consent of other existing partners.

E.

A new partner always pays book value.

The right to participate in management of the business cannot be conveyed without the consent of other existing partners.

A.

to reward partners for work performed in the business.

B.

to reduce the partners’ capital account balances at the end of an accounting period.

C.

to record interest earned on a partner’s capital balance.

D.

to reduce the basic investment that has been made in the business.

E.

to record the partnership’s payment of a partner’s personal expense such as income tax.

to record interest earned on a partner’s capital balance.

A.

$28,800.

B.

$33,600.

C.

$34,560.

D.

$35,520.

E.

$38,400.

$33,600.

The carrying amounts of the assets and liabilities of the partnership are the same as their current fair values. Dorr will be admitted to the partnership with a 20% capital interest and a 20% share of net income and losses in exchange for a cash investment. The amount of cash that Dorr should invest in the partnership is:

A.

$25,000.

B.

$30,000.

C.

$37,500.

D.

$75,000.

E.

$90,000.

$37,500.

A.

Option A

B.

Option B

C.

Option C

D.

Option D

E.

Option E

Option D

A.

$6,667 debit to John, Capital.

B.

$6,667 credit to John, Capital.

C.

$20,000 debit to John, Capital.

D.

$5,000 debit to John, Capital.

E.

$5,000 credit to John, Capital.

$6,667 debit to John, Capital.

A.

$20,000.

B.

$30,000.

C.

$45,000.

D.

$50,000.

E.

$200,000.

$45,000.

Donald and Hanes shared net income and losses in the ratio of 3:2, respectively. The partners agreed to admit May to the partnership with a 35% interest in partnership capital and net income. May invested $100,000 cash, and no goodwill was recognized.

What is the balance of May’s capital account after the new partnership is created?

A.

$84,000.

B.

$100,000.

C.

$140,000.

D.

$176,000.

E.

$200,000.

$140,000.

Donald and Hanes shared net income and losses in the ratio of 3:2, respectively. The partners agreed to admit May to the partnership with a 35% interest in partnership capital and net income. May invested $100,000 cash, and no goodwill was recognized.

What is the balance of Donald’s capital account after the new partnership is created?

A.

$84,000.

B.

$100,000.

C.

$140,000.

D.

$176,000.

E.

$200,000.

$176,000.

Donald and Hanes shared net income and losses in the ratio of 3:2, respectively. The partners agreed to admit May to the partnership with a 35% interest in partnership capital and net income. May invested $100,000 cash, and no goodwill was recognized.

What is the balance of Hanes’s capital account after the new partnership is created?

A.

$84,000.

B.

$100,000.

C.

$140,000.

D.

$176,000.

E.

$200,000.

$84,000.

What is the new total balance of the partnership accounts?

A.

$84,000.

B.

$140,000.

C.

$176,000.

D.

$200,000.

E.

$400,000.

$400,000.

1) allocation of salaries.

2) the number of years with the partnership.

3) the amount of time each partner works.

4) the average capital invested.

A.

1 and 2.

B.

1 and 3.

C.

1, 2, and 4.

D.

1, 3, and 4.

E.

1, 2, 3, and 4.

1, 2, 3, and 4.

If C is to contribute an amount equal to his book value share of the new partnership, how much should C contribute?

A.

$22,000

B.

$20,000

C.

$25,000

D.

$18,000

E.

$10,000

$25,000

C contributes $38,000 to the partnership and the bonus method is used. What amount will be credited for C’s beginning capital balance?

A.

$20,000

B.

$25,000

C.

$27,600

D.

$32,600

E.

$38,000

$27,600

If C contributes $40,000 to the partnership and the goodwill method is used, what amount will be debited for goodwill?

A.

$15,000

B.

$20,000

C.

$25,000

D.

$28,000

E.

$60,000

$60,000

C contributes $10,000 to the partnership and the goodwill method is used. What will be the result of the goodwill calculation?

A.

Goodwill of $15,000; split among the original partners.

B.

Goodwill of $15,000; all to C.

C.

Goodwill of $15,000; split among all four partners: P, L, O, and C.

D.

Goodwill of $12,000; all to C.

E.

Goodwill of $12,000; split among original partners.

Goodwill of $15,000; all to C.

Roberts retires and is paid $160,000 based on an independent appraisal of the business. If the goodwill method is used, what is the capital balance of Peter?

A.

$20,000.

B.

$60,000.

C.

$110,000.

D.

$120,000.

E.

$230,000.

$110,000.

Roberts retires and is paid $160,000 based on an independent appraisal of the business. If the goodwill method is used, what is the capital balance of Dana?

A.

$20,000.

B.

$60,000.

C.

$110,000.

D.

$120,000.

E.

$230,000.

$120,000.

What is the total partnership capital after Roberts retires receiving $160,000 and using the goodwill method?

A.

$290,000.

B.

$176,000.

C.

$80,000.

D.

$120,000.

E.

$230,000.

$230,000.

Anne retires and is paid $80,000 based on an independent appraisal of the business. If the goodwill method is used, what is the capital of the remaining partners?

A.

Donald, $55,000; Todd, $60,000

B.

Donald, $40,000; Todd, $30,000

C.

Donald, $65,000; Todd, $55,000

D.

Donald, $15,000; Todd, $30,000

Donald, $55,000; Todd, $60,000

Anne retires and is paid $80,000 based on the terms of the original partnership agreement. If the bonus method is used, what is the capital of the remaining partners?

A.

Donald, $40,000; Todd, $30,000

B.

Donald, $30,000; Todd, $10,000

C.

Donald, $50,000; Todd, $50,000

D.

Donald, $24,000; Todd, $18,000

Donald, $30,000; Todd, $10,000

What is the total partnership capital after Anne retires receiving $80,000 and using the bonus method?

A.

$70,000.

B.

$40,000.

C.

$60,000.

D.

$80,000.

E.

$42,000.

$40,000.

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