11 which of the following is true of ownership changes in a partnership a admitting 4306989

11 which of the following is true of ownership changes in a partnership a admitting 4306989

11) Which of the following is true of ownership changes in a partnership?

A) Admitting a new partner does not change the core structure of the old partnership.

B) The purchase of an existing partner's interest is a transaction between the new partner and the partnership firm.

C) Any time the partner mix changes, the old partnership ceases to exist and a new partnership begins.

D) A person can become a partner by purchasing an existing partner's interest, even without the approval of the other partners.

12) Keith and Jim are partners. Keith has a capital balance of $50,000 and Jim has a capital balance of $35,000. Jim sells $15,000 of his ownership to Bill. Which of the following is true of the journal entry to admit Bill?

A) Bill, Capital will be debited for $20,000.

B) Jim, Capital will be debited for $20,000.

C) Jim, Capital will be credited for $15,000.

D) Bill, Capital will be credited for $15,000.

13) Dominic and Morgan are partners. Dominic has a capital balance of $350,000 and Morgan has a capital balance of $245,000. Morgan sells $105,000 of his ownership to Lance. Which of the following is true of the items in balance sheet?

A) The total equity decreases by $105,000.

B) The total equity remains unchanged.

C) Assets will decrease by $105,000.

D) Assets will increase by $105,000.

14) Raul and Bianca are partners. Raul has a capital balance of $50,000 and Bianca has a capital balance of $36,000. Bianca sells half of her ownership interest to Bill and Bianca accepts $20,000 from Bill. Which of the following is true of the journal entry to record this transaction?

A) Bianca, Capital is credited for $20,000 and Raul, Capital is debited for $18,000.

B) Bill, Capital is credited for $18,000 and Raul, Capital is debited for $20,000.

C) Bill, Capital is credited for $18,000 and Bianca, Capital is debited for $18,000.

D) Bianca, Capital is credited for $20,000 and Raul, Capital is debited for $20,000.

15) Which of the following is true when a new partner is admitted by purchasing an existing partner's interest?

A) Only the transfer of cash from the new partner to the existing partner is recorded.

B) Admission of the partner affects only the amount of total assets.

C) Admission of the partner affects the total equity amount.

D) The only journal entry the partnership records is the transfer of partner's capital.

16) Floyd and Merriam start a partnership business on June 12, 2019. Their capital account balances as of December 31, 2020 stood as follows:

Floyd

$50,000

Merriam

20,000

Floyd agrees to sell off half of his share to Ramelow in exchange for $30,000 cash. Which of the following is the correct journal entry in the books of the firm for the above transfer of interest?

A)

Cash

30,000

            Ramelow, Capital

30,000

B)

Floyd, Capital

25,000

            Ramelow, Capital

25,000

C)

Cash

30,000

Floyd, Capital

25,000

            Ramelow, Capital

55,000

D)

Cash

30,000

            Floyd, Capital

5,000

            Ramelow, Capital

25,000

17) Floyd and Merriam start a partnership business on June 12, 2019. Their capital account balances as of December 31, 2020 stood as follows:

Floyd

$50,000

Merriam

20,000

Floyd and Merriam share profits and losses equally. They agreed to dissolve the partnership and start a new one, admitting Ramelow for one-half share in the capital in exchange for land and equipment having a total market value of $70,000. Which of the following is the correct journal entry to record the introduction of Ramelow as a partner?

A)

Land and equipment

70,000

            Ramelow, Capital

70,000

B)

Floyd, Capital

70,000

            Ramelow, Capital

70,000

C)

Merriam, Capital

35,000

Floyd, Capital

35,000

            Ramelow, Capital

70,000

D)

Land and equipment

70,000

            Floyd, Capital

35,000

            Ramelow, Capital

35,000

18) Floyd and Merriam start a partnership business on June 12, 2019. Their capital account balances as of December 31, 2020 stood as follows:

Floyd

$50,000

Merriam

20,000

They agreed to admit Ramelow into the business for a one-fifth interest in the new partnership. He had to bring in a cash contribution of $30,000 for the same. Assuming that Floyd and Merriam shared profits and losses in the ratio 3:1 before the admission of Ramelow. Which of the following is the correct journal entry to record the above admission?

A)

Cash

30,000

            Ramelow, Capital

30,000

B)

Cash

30,000

            Merriam, Capital

7,500

            Floyd, Capital

22,500

C)

Merriam, Capital

22,500

Floyd, Capital

7,500

            Ramelow, Capital

30,000

D)

Cash

30,000

            Floyd, Capital

7,500

            Merriam, Capital

2,500

            Ramelow, Capital

20,000

19) Floyd and Merriam start a partnership business on June 12, 2019. Their capital account balances as of December 31, 2020 stood as follows:

Floyd

$50,000

Merriam

20,000

They agreed to admit Ramelow into the business for a one-third interest in the new partnership. He had to bring in a cash contribution of $20,000 for the same. Assuming that Floyd and Merriam shared profits and losses equally before the admission of Ramelow. Which of the following is the correct journal entry to record the above admission?

A)

Cash

20,000

            Ramelow, Capital

20,000

B)

Cash

20,000

Merriam, Capital

5,000

Floyd, Capital

5,000

            Ramelow, Capital

30,000

C)

Merriam, Capital

15,000

Floyd, Capital

15,000

            Ramelow, Capital

30,000

D)

Cash

20,000

            Floyd, Capital

5,000

            Merriam, Capital

5,000

            Ramelow, Capital

10,000

20) Floyd and Merriam start a partnership business on June 12, 2019. Their capital account balances as of December 31, 2020 stood as follows:

Floyd

$50,000

Merriam

20,000

They agreed to admit Ramelow into the business for a one-third interest in the new partnership. He had to bring in a cash contribution of $20,000 for the same. Which of the following is the correct capital account balance of Ramelow after he enters the business?

A) $20,000

B) $30,000

C) $25,000

D) $50,000

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