1) 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 $34,000 and $26,000, respectively; and the remainder to be divided equally. How much of the net income of $120,000 is allocated to Xavier?

a.$104,000

b.$106,000

c.$15,000

d.$59,000

2)

On January 1, Gemstone Company obtained a $165,000, 10-year, 7% installment note from Guarantee Bank. The note requires annual payments of $23,492, with the first payment occurring on the last day of the fiscal year. The first payment consists of interest of $11,550 and principal repayment of $11,942. The journal entry to record the issuance of the installment note for cash on January 1 would include a

a.credit to interest payable for $11,550

b.credit to notes payable for $165,000

c.debit to interest expense for $11,550

d.debit to notes payable for $165,000

3) If a company has preferred stock, the preferred stock dividend is added to net income when computing earnings per common share.

True

False

4) The statement of members' equity is used for equity reporting of a partnership.

true

false