1) Pell invests $50,000 in a partnership for a 10 percent interest. The partnership has total capital of $450,000 after admitting Pell. Which of the following is true?

A) Pell received a bonus of $5,000

B) The original partners' capital in the business was $420,000 before admitting Pell

C) The original partners received a bonus of $5,000

D) Pell's capital is $50,000

E) None of the above.

2) Partners L and M receive a salary of $25,000 and $50,000, respectively, and share income and losses in a 3:1 ratio, respectively. If the partnership suffers a $75,000 net loss in 2012, the entry to close the income or loss into their capital accounts is:

A) L, Capital 25,000 $ M, Capital 50,000 $ Income Summary 75,000 $

B) L, Capital 75,000 $ M, Capital 37,500 $ Income Summary 37,500 $

C) L, Capital 56,250 $ M, Capital 18,750 $ Income Summary 75,000 $

D) L, Capital 87,500 $ M, Capital 12,500 $ Income Summary 75,000 $

E) None of the above.

3) D and E are partners who have agreed to admit F, who will invest $70,000 in the partnership for a 30 percent interest. The previous capital balances were D $25,000 and E $40,000. A and B had shared profits and losses equally. The entry that records Fs admission to the partnership is:

A) Cash 70,000 $ F, Capital 70,000 $

B) Cash 55,000 $ F, Capital 55,000 $

C) Cash 70,000 $ D, Capital 1,250 $ E, Capital 1,250 $ F, Capital 67,500 $

D) F, Capital 70,000 $ Cash 70,000 $

E) None of the above.

4) G has bought H's interest in the H & I Partnership for a $50,000 direct payment to H. The capital balances before the sale were $45,000 and $60,000, respectively. The entry to record the purchase of interest in partnership is:

A) H, Capital 45,000 $ G, Capital 45,000 $

B) H, Capital 50,000 $ G, Capital 50,000 $

C) G, Capital 50,000 $ Cash 50,000 $

D) Cash 50,000 $ G, Capital 50,000 $

E) None of the above.