Question

answer them all or pass it to someone else I'll rate

1. When a limited liability company is formed,

a.the partnership activities are limited

b.all partners have limited liability

c.some of the partners have limited liability

d.None of the partners has limited liability

2.  Use the information below to answer the question that follow.

Sandra and Kelsey are forming a partnership. Sandra will invest a piece of equipment with a book value of $6,700 and a fair market value of $12,900. Kelsey will invest a building with a book value of $30,200 and a fair market value of $51,100.

What amount will be recorded to Kelsey's capital account?

a.$51,100

b.$30,200

c.$12,900

d.$6,700

3. Xavier and Yolanda have original investments of $50,000 and $100,000, respectively, in a partnership. The articles of partnership include the following provisions regarding the division of net income: interest on original investment at 20%; salary allowances of $27,000 and $18,000, respectively; and the remainder to be divided equally. How much of the net income of $81,000 is allocated to Xavier?

a.$37,000

b.$40,000

c.$42,500

d.$42,000

4. Tucker and Titus are partners who share income in the ratio of 3:1. Their capital balances are $46,100 and $65,600, respectively. The partnership generated net income of $50,000 for the year. What is Tucker's capital balance after closing the revenue and expense accounts to the capital accounts?

a.$100,320

b.$50,160

c.$66,880

d.$83,600

5. 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 Saturn's capital balance after closing the revenue and expense accounts to the capital accounts?

a.$102,500

b.$120,000

c.$127,500

d.$112,500

6. Lambert invests $11,919 for a 1/3 interest in a partnership in which the other partners have capital totaling $40,926 before admitting Lambert. After distribution of the bonus, what is Lambert's capital?

a.$26,423

b.$3,973

c.$11,919

d.$17,615

7. The Calvin-Dogwood Partnership owns inventory that was purchased for $90,000, has a current replacement cost of $85,900, and is priced to sell for $125,000. At what amount should the inventory be recorded in the accounts of the new partnership if Alexis is to be admitted?

a.$129,100

b.$125,000

c.$90,000

d.$85,900

8.  

Immediately prior to the admission of Abbott, the Smith-Jones Partnership assets had been adjusted to current market prices and the capital balances of Smith and Jones were $61,700 and $66,800, respectively. If the parties agree that the business is worth $171,300, what is the amount of bonus that should be recognized in the accounts at the admission of Abbott?

a.$42,800

b.$109,600

c.$104,500

d.$21,400

Answer 1

1) When a limited liability company is formed

Solution: Some of the partners have limited liability.

Explanation: A limited liability is a partnership where all or majority partners have limited liabilities

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2) Sandra and Kelsey are forming a partnership. Sandra will invest a piece of equipment with a book value of $6,700 and a fair market value of $12,900. Kelsey will invest a building with a book value of $30,200 and a fair market value of $51,100. What amount will be recorded to Kelsey's capital account?

Solution: 51,100

Working: Kelsey's capital account will be recorded at FMV

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3) Xavier and Yolanda have original investments of $50,000 and $100,000, respectively, in a partnership. The articles of partnership include the following provisions regarding the division of net income: interest on original investment at 20%; salary allowances of $27,000 and $18,000, respectively; and the remainder to be divided equally. How much of the net income of $81,000 is allocated to Xavier?

Solution: 40,000

Explanation:

	Xavier	Yolanda
	50,000	100,000
Interest on investmen	10000	20000
Salary	27000	18000
Total	37000	38000
(81,000 - 75000 = 6000	3000	300
	40000	38300

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4) Tucker and Titus are partners who share income in the ratio of 3:1. Their capital balances are $46,100 and $65,600, respectively. The partnership generated net income of $50,000 for the year. What is Tucker's capital balance after closing the revenue and expense accounts to the capital accounts?

Solution: $83,600

Working: 46,100 + (50,000 * 3/4) = 83,600

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5) 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 Saturn's capital balance after closing the revenue and expense accounts to the capital accounts?

Solution: 127,500

Working: 120,000 + (30,000 * 1/4) = 127,500

6) Lambert invests $11,919 for a 1/3 interest in a partnership in which the other partners have capital totaling $40,926 before admitting Lambert. After distribution of the bonus, what is Lambert's capital?

Solution: $17,615

Working: (11,919 + 40,926 ) * 1/3 = 17,615

7) The Calvin-Dogwood Partnership owns inventory that was purchased for $90,000, has a current replacement cost of $85,900, and is priced to sell for $125,000. At what amount should the inventory be recorded in the accounts of the new partnership if Alexis is to be admitted?

Solution: $85,900

Explanation: Inventory will be recorded at replacement cost

8) Immediately prior to the admission of Abbott, the Smith-Jones Partnership assets had been adjusted to current market prices and the capital balances of Smith and Jones were $61,700 and $66,800, respectively. If the parties agree that the business is worth $171,300, what is the amount of bonus that should be recognized in the accounts at the admission of Abbott?

Solution: 42,800

Explanation: 171300 - 61,700 - 66,800 = 42,800