Reference no: EM132318496

Question

Mathew, Patrick, and Robin and have capital balances of? $75,000, $125,000 and? $93,000, respectively. As per the partnership? agreement, Mathew gets a profit share of? 2/9; Patrick gets? 4/9; and Robin gets? 3/9.

Partnership agrees to pay? $65,000 as final settlement to Mathew. How much bonus will Robin receive as a result of this? transaction? (Do not round intermediate calculations and round the final answer to the nearest?dollar.)
A.$4,444

B.$5,556

C.$4,286

D.$5,714

How is the accounting equation affected when a partner withdraws? cash?

A.Liabilities decrease and assets? increase; equity is not affected.

B.Assets increase and equity? decreases; liabilities are not affected.

C.Both equity and assets? decrease; liabilities are not affected.

D.Both assets and liabilities? decrease; equity is not affected.

The income of a limited liability company cannot be taxed to the members as though they were partners.

True

False

Allan and Ralph are partners. Allan has a capital balance of? $92,000 and Ralph has a capital balance of?$75,000. Carol invested? $60,000 to acquire an ownership interest of? $50,000. Which of the following is true of the impact of the transaction on the balance? sheet?

A.Assets will increase and equity will decrease.

B.Both assets and equity will increase.

C.Asset increases and the equity will remain unchanged.

D.Assets will decrease and the equity will remain unchanged.

Frank and Harry are partners. Frank has a capital balance of $52,000 and Harry has a capital balance of $39,000. Bill contributes a building with a fair market value of $32,000 to the partnership for an ownership interest of? 20%. Calculate? Bill's capital in the new partnership.

A.$7,000

B.$32,000

C.$24,600

D.$ 20,000

In a? partnership, mutual agency means that? ________.

A.the addition of a new partner does not dissolve the old? partnership; there is a mutual exchange of ownership with the existing partners

B.any partner can bind the business to a contract within the scope of its regular business operations

C.every partner must contribute the same amount of capital

D.the agency problem between the principal and agents are mutual and are neutralized

A? ________ is a form of business organization that combines the advantages of both a partnership and a corporation.

A.C Corporation

B.limited liability company

C.limited liability partnership

D.general partnership

Which characteristic identifies a general? partnership?

A.Limited personal liability

B.Unlimited life

C.No business income tax

D.All of the above

If a? partner's capital account is credited with the amount that he or she contributed in? cash, which of the following financial statements will be? affected?

A.the bank reconciliation statement

B.the interest payment schedule

C.the statement of? partners' equity

D.the withdrawal statement