1. If one or more of the partners transfers noncash assets such as inventory, land, equipment, or a building to form the business, how do we record the assets?

A. Use the fair value

B. Use the book value

C. Use Bonus Method

D. Use Goodwill Method

2. James contributes cash of $70,000, and Joyce invests only $10,000. Joyce, however, is an accomplished graphic artist, a skill that is considered especially valuable to this. James and Joyce have contributed a total of $80,000 in identifiable assets to their partnership and have decided on capital balance ratio as James:Joyce=3:1. How much do we credit "Joyce, Capital" if bonus method is used?

A. 10,000

B. 20,000

C. 30,000

D. 40,000

3. James contributes cash of $70,000, and Joyce invests only $10,000. Joyce, however, is an accomplished graphic artist, a skill that is considered especially valuable to this. James and Joyce have contributed a total of $80,000 in identifiable assets to their partnership and have decided on capital balance ratio as James:Joyce=3:1. How much do we credit "Joyce, Capital" if goodwill method is used?

A. 10,000

B. 23,333

C. 30,000

D. 46,667

4. We discussed the process of partnership termination and liquidation. After liquidating the assets and paying off outstanding liabilities, how do we distribute the remaining cash, if there is any, to partners?

A. According to their agreed upon profit sharing ratios.

B. According to their agreed upon loss sharing ratios.

C. Equally to every partner

D. According to their capital account balances.