14) 14) Rodriguez and Ying start a partnership business on July 1, 2014. Rodriguez brings in cash worth $4,000, furniture with a current market value of $50,000, and computer equipment. The computer equipment cost $45,000 in 2011 and has an accumulated depreciation of $25,000. The current market value of the computer equipment is $18,000. At what value should the computer equipment be recorded in the books of the partnership firm? A) $20,000 B) $25,000 C) $45,000 D) $18,000 15)__ 15) Frank and Harry are partners. Frank has a capital balance of $50,000 and Harry has a capital balance of $40,000. Bill invested a building worth $30,000 to the partnership for an ownership interest of 20%. Calculate Bill's capital in the new partnership. A) $24,000 B) $20,000 C) $30,000 D) $10,000 2 16) -- 16) Andre, Beau, and Caroline share profits and losses of their partnership as 2:2:5. If the net income is $900,000, calculate the profit share of Caroline. A) $100,000 B) $500,000 C) $250,000 D) $200,000 17) Restrictions on retained earnings: A) require adjusting journal entries. B) are designed to maximize dividends paid to shareholders. C) are usually reported in the notes to the financial statements. D) are reported on the income statement. 18) On the date of record of dividends, the company: A) records the dividend payable amount. B) determines who owns the shares of stock as of that date. C) issues new shares of stock. D) disburses dividend payments to shareholders. 19) 19) Which of the following statements is true of a corporation? A) Shares of stock cannot be readily bought and sold by investors on the open market. B) The liabilities of the corporation can be paid by the personal assets of the shareholders. C) Corporations pay income tax on corporate earnings, and shareholders pay personal income tax on corporate dividends and gains from sale of stock. D) Shareholders are authorized to sign contracts or make business commitments on behalf of the corporation. 20) - 20) Land is purchased by a business for $100,000. The company pays for the land by a cash payment of $20,000 and promised to pay the remaining amount at a later period. What is net effect of this transaction on the business's accounting equation? A) Assets increase by $100,000; liabilities decrease by $80,000. B) Assets increase by $100,000; liabilities decrease by $20,000. C) Assets increase by $80,000; liabilities increase by $80,000. D) Assets increase by $80,000; equity increases by $80,000. 21) The Sarbanes-Oxley Act (SOX) made it a criminal offense to: A) falsify financial information. B) transfer shares of stock. C) declare bankruptcy. D) issue debentures 22) 22) Ben Inc. recently signed a $350,000, six-month note on August 22, 2013. The interest rate is 6.5% How much total interest will be due on the note at maturity? A) $7,583 B) $22,750 C) $11,375 D) $9,479 23) 23) Art Parrish, the sole employee of Parrish Sales, has gross salary for March of $4,000. The entire amount is under the OASDI limit of $110,100, and thus subject to FICA. His year-to-date pay has already exceeded the $7,000 cap for FUTA and SUTA. Which of the following is a part of journal entry in the payroll cycle to record the employer's payroll taxes? A) credit to Payroll Tax Expense B) debit to Payroll Tax Expense C) debit to FICA Tax Payable D) debit to Cash
