Question (1):
Multiple Questions
42.
) ‫ عالمات‬5 (
: )1( ‫السؤال رقم‬
‫اختيار من متعدد‬
Which one of the following would not be considered a disadvantage of the partnership form of
organization?
a.
b.
c.
d.
Limited life
Unlimited liability
Mutual agency
Ease of formation
58.
Norton invests personally owned equipment, which originally cost $110,000 and has accumulated
depreciation of $30,000 in the Norton and Kennett partnership. Both partners agree that the fair market
value of the equipment was $60,000. The entry made by the partnership to record Norton's investment
should be
a. Equipment.............................................................................. 110,000
Accumulated Depreciation—Equipment......................
30,000
Norton, Capital .............................................................
80,000
b. Equipment..............................................................................
80,000
Norton, Capital .............................................................
80,000
c. Equipment..............................................................................
60,000
Loss on Purchase of Equipment ............................................
20,000
Accumulated Depreciation—Equipment...............................
30,000
Norton, Capital .............................................................
110,000
d. Equipment..............................................................................
60,000
Norton, Capital .............................................................
60,000
64.
A partner invests into a partnership a building with an original cost of $90,000 and accumulated
depreciation of $40,000. This building has a $70,000 fair market value. As a result of the investment,
the partner’s capital account will be credited for
a.
b.
c.
d.
$70,000.
$50,000.
$90,000.
$120,000.
Partners Abel and Cain have capital balances in a partnership of $40,000 and $60,000, respectively. They agree
to share profits and losses as follows:
Abel
Cain
As salaries
$10,000
$12,000
As interest on capital at the beginning of the year
10%
10%
Remaining profits or losses
50%
50%
69.
If income for the year was $50,000, what will be the distribution of income to Cain?
a.
b.
c.
d.
70.
If income for the year was $30,000, what will be the distribution of income to Abel?
a.
b.
c.
d.
71.
$23,000
$27,000
$20,000
$10,000
$13,000
$77,000
$10,000
$14,000
If net loss for the year was $2,000, what will be the distribution to Cain?
a. $12,000 income
1
b. $1,000 income
c. $1,000 loss
d. $2,000 loss
Use the following information for questions 115–116.
Carley and Kingman are partners who share income and losses in the ratio of 3:2, respectively. On August 31,
their capital balances were: Carley, $175,000 and Kingman, $150,000. On that date, they agree to admit Lerner
as a partner with a one-third capital interest.
a
115. If Lerner invests $125,000 in the partnership, what is Carley's capital balance after Lerner's admittance?
a.
b.
c.
d.
a
$150,000
$158,333
$160,000
$175,000
116. If Lerner invests $200,000 in the partnership, what is Kingman's capital balance after Lerner's
admittance?
a.
b.
c.
d.
$175,000
$160,000
$157,500
$150,000
a
127. Which of the following is correct when admitting a new partner into an existing partnership?
Purchase of an Interest
Admission by Investment
a. Total net assets
unchanged
unchanged
b. Total capital
increased
unchanged
c. Total net assets
unchanged
increased
d. Total capital
unchanged
unchanged
a
134. When a partner withdraws from the firm, which of the following reflects the correct partnership effects?
Payment from
Payment from
Partners' Personal Assets
Partnership Assets
a. Total net assets
decreased
decreased
b. Total capital
decreased
decreased
c. Total net assets
unchanged
decreased
d. Total capital
unchanged
unchanged
ANSWER FORM
Q:1
Q:2
Q:3
Q:4
Q:5
SECOND Category : practical applications and analysis skills
The aim from these questions is to asses the students ability to analyze
and comprehend Information In addition to his ability to apply the
Information in a practical way .
Q:6
Q:7
Q:8
Q : 9 Q : 10
‫أسئلة الجانب التطبيقي وقياس قدرة الطالب على التحليل واالستنتاج‬: ‫الفئة الثانية‬
‫الهدف من هذا النوع من األسئلة هو فحص قدرة الطالب على التحليل واالستنتاج ومقدار‬
.‫مهارته في الربط بين المعلومات النظرية التي درسها والجانب التطبيقي العملي للمادة‬
Ex. 165
Hope & Crosby Co. reports net income of $34,000. The partnership agreement provides for annual salaries of
$24,000 for Hope and $15,000 for Crosby and interest allowances of $4,000 to Hope and $6,000 to Crosby.
Any remaining income or loss is to be shared 70% by Hope and 30% by Crosby.
Instructions
2
Compute the amount of net income distributed to each partner.
Solution 165
(8 min.)
Salary allowance
Interest allowance
Total salaries and interest
Remaining deficiency ($15,000)
Hope ($15,000 × 70%)
Crosby ($15,000 × 30%)
Total division
Hope
$24,000
4,000
28,000
Crosby
$15,000
6,000
21,000
Total
$39,000
10,000
49,000
(4,500)
$16,500
(15,000)
$34,000
(10,500)
$17,500
Ex. 168
Prepare a partners' capital statement for Crestwood Company based on the following information.
Crest
Wood
Beginning capital
$30,000
$27,000
Drawings during year
15,000
8,000
Net income was $35,000, and the partners share income 60% to Crest and 40% to Wood.
Solution 168
(8 min.)
CRESTWOOD COMPANY
Partners' Capital Statement
Beginning capital
Add: Net income
Less: Drawings
Ending capital
Crest
$30,000
21,000
51,000
15,000
$36,000
Wood
$27,000
14,000
41,000
8,000
$33,000
THIRD Category : Unfamiliar problems
solving
The aim from these questions is to asses the students ability to use
the information he learned to solve unfamiliar problems which
appear in life and the degree of intelligence to deal with it .
Total
$57,000
35,000
92,000
23,000
$69,000
‫ الفئة الثالثة‬: ‫ أسئلة الذكاء والقدرة على‬. ‫حل المشكالت العملية‬
‫الهدف من هذا النوع من األسئلة هو فحص قدرة الطالب على استخدام المعلومات التي درسها‬
. ‫لحل المشكالت غير المألوفة التي تظهر في الواقع العملي ودرجة الذكاء في التعامل معها‬
Ex. 171
The ODS Partnership is to be liquidated when the ledger shows the following:
Cash
Noncash Assets
Liabilities
Oslo, Capital
Decker, Capital
Silas, Capital
$ 50,000
200,000
50,000
75,000
100,000
25,000
Oslo, Decker, and Silas' income ratios are 6:3:1, respectively.
Instructions
Prepare separate entries to record the liquidation of the partnership assuming that the noncash assets are sold for
$150,000 in cash.
3
Solution 171
(15 min.)
1. Cash ...................................................................................................
Loss on Realization ...........................................................................
Noncash Assets .........................................................................
150,000
50,000
2. Oslo, Capital ($50,000 × 6/10) ..........................................................
Decker, Capital ($50,000 × 3/10) ......................................................
Silas, Capital ($50,000 × 1/10) ..........................................................
Loss on Realization ..................................................................
30,000
15,000
5,000
3. Liabilities ...........................................................................................
Cash ..........................................................................................
50,000
4. Oslo, Capital ($75,000 – $30,000) ....................................................
Decker, Capital ($100,000 – $15,000) ..............................................
Silas, Capital ($25,000 – $5,000) ......................................................
Cash ($50,000 + $150,000 – $50,000) .....................................
45,000
85,000
20,000
200,000
50,000
50,000
150,000
a
Ex. 174
The Howell and Parks Partnership has partner capital account balances as follows:
Howell, Capital
Parks, Capital
$550,000
250,000
The partners share income and losses in the ratio of 60% to Howell and 40% to Parks.
Instructions
Prepare the journal entry on the books of the partnership to record the admission of Tyler as a new partner
under the following three independent circumstances.
1. Tyler pays $350,000 to Howell and $150,000 to Parks for one-half of each of their ownership interest in a
personal transaction.
2. Tyler invests $850,000 in the partnership for a one-third interest in partnership capital.
3. Tyler invests $175,000 in the partnership for a one-third interest in partnership capital.
a
Solution 174
1.
(20 min.)
Howell, Capital ...............................................................................
Parks, Capital ..................................................................................
Tyler, Capital .........................................................................
(To record admission of Tyler by purchase)
275,000
125,000
400,000
Total net assets and total capital of the partnership do not change.
2.
Cash ................................................................................................
Howell, Capital ......................................................................
Parks, Capital .........................................................................
Tyler, Capital .........................................................................
(To record admission of Tyler and bonus to old partners)
Total capital of existing partnership
Investment by new partner, Tyler
4
850,000
180,000
120,000
550,000
$ 800,000
850,000
Total capital of new partnership
$1,650,000
Tyler's capital credit = $1,650,000 × 1/3 = $550,000
Tyler's investment
Tyler's capital credit
Bonus to old partners
$850,000
550,000
$300,000
Allocation to old partners
Howell (60% × $300,000)
Parks (40% × $300,000)
3.
a
$180,000
120,000
$300,000
Cash ................................................................................................
Howell, Capital ...............................................................................
Parks, Capital ..................................................................................
Tyler, Capital .........................................................................
(To record Tyler's admission and bonus)
Solution 174
325,000
(cont.)
Total capital of existing partnership
Investment by new partner, Tyler
Total capital of new partnership
$800,000
175,000
$975,000
Tyler's capital credit = $975,000 × 1/3 = $325,000
Bonus to Tyler ($325,000 – $175,000) = $150,000
Reduction of old partners' capital
Howell ($150,000 × 60%)
Parks ($150,000 × 40%)
5
175,000
90,000
60,000
$ 90,000
60,000
$150,000