Exercise 1 BE12-1 The following terms were introduced in this chapter: 1. Profit and loss ratio 2. Admission by investment 3. Partnership liquidation 4. Mutual agency 5. Salary allowance 6. Withdrawal by payment from partners personal assets 7. Capital deficiency 8. Limited liability partnership 9. General partnership 10. Partnership dissolution Match the terms with the following descriptions: (a) Partners have limited liability. (b) Partners have unlimited liability. (c) It is the basis for dividing profit and loss. (d) Partnership assets and capital increase with the change in partners. (e) Partnership assets and capital stay the same with the change in partners. (1) Actions of partners are binding on all other partners. It is a compensation for differences in personal effort put into the partnership (h) - Partnership is changed by the addition or withdrawal of a partner. (i) - There is a debit balance in a partner's capital account. Partnership is ended Exercise 2 BE12-2 R. Black and B. Rivers decide to organize the Black River Partnership. Black contributes $10,000 cash and equipment that originally cost $7,000. The accumulated depreciation on the equipment is $2,500 and the fair value is $4,000. Rivers contributes 52,400 of accounts receivable, of which the partners agree that $2,000 is collectible. Rivers will also contribute the amount of cash required so both partners have the same amount in their capital accounts. Prepare the entry to record each partner's investment in the partnership on July 1, 2014