7. A contingency that is remote A) should be disclosed in the financial statements. B) must be accrued as a loss. C) does not need to be disclosed. D) is recorded as a contingent liability 8. A general partner in a partnership A) has unlimited liability for all partnership debts. B) is always the general manager of the firm. C) is the partner who lacks a specialization. D) is liable for partnership liabilities only to the extent of that partner's capital equity. 9. A partner invests into a partnership a building with an original cost of $360,000 and accumulated depreciation of $160.000. This building has a $280,000 fair value. As a result of the investment, the partner's capital account will be credited for A) $280,000. B) $200,000. C) $360,000. D) $480,000. 10. Brian and Sandy are forming a partnership, Brian will invest a truck with a book value of S10,000 and a fair value of $14,000. Sandy will invest a building with a book value of $30,000 and a fair value of $42,000 with a mortgage of $15,000. At what amount should the building be recorded? A) $30,000 B) $27,000 C) $42,000 D) $45,000 11. The partnership agreement of Alix, Gise, and Bosco provides for the following income ratio: (a) Alix, the managing partner, receives a salary allowance of $108,000, (b) each partner receives 15 % interest on average capital investment, and (c) remaining net income or loss is divided equally. The average capital investments for the year were: Alix $600,000, Gise $1,200,000, and Bosco $1,800,000. If partnership net income is $720,000, the amount distributed to Gise should be: A) $180,000. B) $186,000. C) $204,000. D) $240,000. Page 2 C D E 31 A cB C cD E 32 A cB Ca D: 33 Fa AVEE