Reference no: EM131743685

Q1. Michael is investing in a partnership with Monica. Michael's contribution as part of his initial investment is: Accounts Receivable $80,000, Allowance for Doubtful Accounts of $12,000, and Cash $15,000. Michael's initial contribution in the partnership has the following entry:

A. debit to Accounts Receivable for $78,000

B. credit to Michael, Capital $83,000

C. debit to Allowance for Doubtful Accounts for $12,000

D. credit to Michael, Capital $92,000

Q2. In the partnership formed by Felix and Cristy, he is investing a truck with a book value of $15,000 and a fair value of $12,000. Cristy is investing a building with a book value of $40,000 and a fair value of $55,000 with a mortgage of $20,000. Determine the amount that Cristy's capital account should be recorded at.

A. $28,000

B. $40,000

C. $55,000

D. $20,000

Q3. Cristy and Elizabeth are entering into a partnership. Cristy contributes equipment that originally cost $65,000, but now has a book value of $10,000 and a fair value of $14,000. Determine the entry that the partnership makes to record Cristy's initial contribution.

A. credit to Accumulated Depreciation for $55,000

B. debit to equipment for $55,000

C. debit to equipment for $65,000

D. debit to equipment for $14,000

Q4. In the partnership formed by Felix and Cristy, he is investing a truck with a book value of $15,000 and a fair value of $12,000. Cristy is investing a building with a book value of $40,000 and a fair value of $55,000 with a mortgage of $20,000. Determine the amount the building should be recorded at.

A. $15,000

B. $20,000

C. $40,000

D. $55,000

Q5. Identify the item that should not be considered an expense of a partnership when determining income for Year 2014.

A. Salary expense to partners

B. Insurance expense

C. Supplies expense

D. Transportation expense