Question
30) Bob and Bill allocate 2/3 of their partnership's profits and losses to Bob and 1/3 to Bill. The net income of the firm is
30) Bob and Bill allocate 2/3 of their partnership's profits and losses to Bob and 1/3 to Bill. The net income of the firm is $20,000. The journal entry to close the Income Summary will include ________. (Do not round any intermediate calculations.)
A) credit to Income Summary for $13,333
B) debit to Bob, Capital for $6667
C) credit to Bob, Capital for $13,333
D) credit to Income Summary for $20,000; E) None of the above
31) Felix and Ian allocate 2/5 of their partnership's profits and losses to Felix and 3/5 to Ian. The net income of the firm is $20,000. The journal entry to close the Income Summary will include ________.
A) credit to Ian, Capital for $12,000
B) debit to Felix, Capital for $12,000
C) debit to Felix, Capital for $8000
D) credit to Income Summary for $20,000; E) None of the above
32) Adam, Bill, and Charlie are partners. The profit and loss sharing rule between them is 4:6:1, with Bill receiving the largest share and Charlie receiving the smallest. The partnership incurs a net loss of $72,000. While closing the Income Summary ________. (Do not round any intermediate calculations.)
A) Income Summary will be debited for $72,000
B) Adam, Capital will be debited for $26,182
C) Adam, Capital will be credited for $39,273
D) Charlie, Capital will be credited for $39,273
E) None of the above
33) When a new partner is admitted to a partnership by purchasing an existing partner's interest, the business's accounting records do not record the transfer of cash from the new partner to the existing partner. A. True; ____or B.False ____
34) ) Admission of a new partner, by contributing directly to the partnership, increases both assets and liabilities by the same amount. A. True; ____or B.False ____
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