Question

1. Tomas and Saturn are partners who share income in the ratio of 3:1. Their capital balances are $83,600 and $38,300, respectively. The partnership generated net income of $40,800. What is Tomas's capital balance after closing the revenue and expense accounts to the capital accounts?

a.$118,530

b.$108,788

c.$129,157

d.$114,200

2. 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 Tomas's capital balance after closing the revenue and expense accounts to the capital accounts?

a.$127,500

b.$57,500

c.$22,500

d.$102,500

3. Hannah Johnson contributed equipment, inventory, and $40,100 cash to a partnership. The equipment had a book value of $28,800 and a market value of $35,900. The inventory had a book value of $46,300 but only had a market value of $11,000 due to obsolescence. The partnership also assumed a $16,900 note payable owed by Hannah that was originally used to purchase the equipment.

What amount should be recorded to Hannah's capital account?

a.$70,100

b.$98,300

c.$122,300

d.$103,900

4. John Prado and Ayana Nicks formed a partnership, dividing income as follows:

Annual salary allowance to Prado, $10,000 and Nicks, $28,000.

Interest of 5% on each partner's capital balance on January 1.

Any remaining net income divided equally.

Prado and Nicks had $20,000 and $50,000, respectively, in their January 1 capital balances. Net income for the year was $30,000.

Required:

How much net income should be distributed to Prado and Nicks?
Prado: $
Nicks: $

Answer 1

1ans) d.$114,200

Tomas's capital balance after closing the revenue and expense accounts to the capital accounts

?=open ing capital+share of net income

=83600+(40,800*3/4)

? =$114,200?

2 ans)d.$102,500

Tomas's capital balance after closing the revenue and expense accounts to the capital account

?=open ing capital+share of net income

? =80000+(30000*3/4)

=102500$

3 ans)a.$70,100

amount should be recorded to Hannah's capital account

particulars	amount$
cash	40100
equipment (FMV)	35900
Inventory    (FMV)	11000
LESS:notes payble	(16900)
Hannah's capital	70100

4 ans)net income should be distributed to Prado and Nicks
Prado: $7895
Nicks: $22105

• ?net income remaining after allowance of salary,intrest should be distributed at agreed ratio
• but in this question net income not sufficient to meet salarys to partners
• 30000$ should be distibuted to partners in their salary allowance ratio