Question

3(12). Price and Phil share income and losses equally after allowing for salaries of $24,000 to Price and $30,000 to Phil. Net income for the partnership is $45,000. Income should be divided as

a.Price, $22,500; Phil, $22,500.

b.Price, $20,000; Phil, $25,000.

c.Price, $27,000; Phil, $18,000.

d.Price, $19,500; Phil, $25,500.

4(12). Arrow and Inlet share income and losses equally after allowing for salaries to Arrow of $27,000 and $33,000 to Inlet. Net income for the partnership is $75,000. If income should be divided $34,500 to Arrow and $40,500 to Inlet, the journal entry will include a

a.debit to Arrow, Capital of $34,500 and a credit to Inlet, Capital of $40,500.

b.debit to Cash of $75,000.

c.credit to Arrow, Capital of $34,500 and a debit to Inlet, Capital of $40,500.

d.credit to Arrow, Capital of $34,500 and a credit to Inlet, Capital of $40,500.

10(12). Ames and Barton are partners who share income in the ratio of 1:2 and have capital balances of $40,000 and $70,000, respectively, at the time they decide to terminate the partnership. After all noncash assets are sold and all liabilities are paid, there is a cash balance of $80,000. What amount of loss on realization should be allocated to Barton?

a.$80,000

b.$30,000

c.$20,000

d.$10,000

5(13). A corporation issues 2,000 shares of common stock for $32,000. The stock has a stated value of $12 per share. The journal entry to record the stock issuance would include a credit to Common Stock for

a.$12,000.

b.$24,000.

c.$32,000.

d.$2,000.

6(13). Steak Company acquired a building valued at $170,000 for property tax purposes in exchange for 10,000 shares of its $5 par common stock. The stock is widely traded and selling for $16 per share. At what amount should the building be recorded by Steak Company?

a.$160,000

b.$50,000

c.$170,000

d.$200,000

9(13). The charter of a corporation provides for the issuance of 100,000 shares of common stock. Assume that 40,000 shares were originally issued and 5,000 were subsequently reacquired. What is the amount of cash dividends to be paid if a $3-per-share dividend is declared?

a.$105,000

b.$120,000

c.$15,000

d.$500,000

13(13). A corporation has 40,000 shares of $25 par value stock outstanding and 45,000 authorized shares. If the corporation issues a 3-for-1 stock split, the number of shares outstanding after the split will be

a.120,000 shares.

b.160,000 shares.

c.40,000 shares.

d.10,000 shares.

14(13). What is the total stockholders' equity based on the following account balances?

Common Stock	$500,000
Paid-In Capital in Excess of Par—Common Stock	50,000
Retained Earnings	190,000
Treasury Stock	40,000

a.$780,000

b.$740,000

c.$630,000

d.$700,000

15(13).Treasury stock that had been purchased for $5,500 last month was reissued this month for $6,500. The journal entry to record the reissuance would include a credit to

a.Paid-In Capital in Excess of Par—Common Stock for $1,000.

b.Treasury Stock for $6,500.

c.Paid-In Capital from Sale of Treasury Stock for $6,500.

d.Paid-In Capital from Sale of Treasury Stock for $1,000.

Answer 1

Answer 3(12)- d. Price, $19,500; Phil, $25,500.
		Price	Phil	Total
Net Income		-	-	45,000.00
Salary to Partners		24,000.00	30,000.00	54,000.00
Balance				(9,000.00)
Income /Loss Divided between Partners		(4,500.00)	(4,500.00)	(9,000.00)
Total		19,500.00	25,500.00
Answer 4(12)-d.credit to Arrow, Capital of $34,500 and a credit to Inlet, Capital of $40,500.
Journal Entry to be passed for distribution of Income:
Date	Particulars	Dr. Amt.	Cr. Amt.
1	Income Summary	75,000.00
	Arrow's Capital		34,500.00
	Inlet's Capital		40,500.00
Answer 10(12)-c. $20,000.
Total Capital		110,000.00
Cash Balance		80,000.00
Loss on Realization		30,000.00
Loss on relization is divided between partners:
Ames - $30,000 X 1/3		10,000.00
Barton - $30,000 X 2/3		20,000.00
Answer 5(13)-b. $24,000
Journal Entry to be passed:
Date	Particulars	Dr. Amt.	Cr. Amt.
1	Cash	32,000.00
	Common Stock (2,000 Shares X $12)		24,000.00
	Additional Paid in Capital in excess of Par		8,000.00