GENERAL REQUIREMENTS

This assignment is to be completed on an individual basis. Students who work together or copy from another student will be issued a failing grade for the course. Cheating of any kind will not be tolerated.

Please label and present all work in an organized fashion. Failure to show supporting work may be construed as cheating on the exam.

Please type all answers and supporting work directly in the body of THIS document and do not submit more than one document.

A partnership comprised of two partners has the following information regarding income and loss allocation:

Partner #1 Partner #2

Initial investment 50,000 40,000

Salary allowance 45,000 35,000

Remainder 60% 40%

In its first year of business, the partnership generates an income of 120,000. Prepare a schedule showing how much income should be allocated to each partner.

On May 30, John Jones sells 100% of his interest in a partnership to Stanley Smith for $120,000. All existing partners have agreed to admit the new partner. As of May 30, the capital account balance of John Jones is $105,000. Prepare any necessary journal entries on the books of the partnership on May 30.

On April 30, a partnership has total partnership capital as follows:

Partner #1, capital 200,000

Partner #2, capital 400,000

Total partnership capital 600,000

The partners allocate income and losses 40% to partner #1 and 60% to partner #2. On April 30, the partners agree to admit a new partner (partner #3) who pays $100,000 to the partnership for a 15% interest in the partnership. Prepare any necessary journal entries on the books of the partnership on April 30.

On December 31, a partnership has total partnership capital as follows:

Partner #1, capital 125,000

Partner #2, capital 170,000

Partner #3, capital 180,000

Total partnership capital 475,000

The partners allocate income and losses 30% to partner #1, 50% to partner #2 and 20% to partner #3. On December 31, Partner #3 retires from the partnership and is paid $200,000 in PARTNERSHIP cash to settle his interest in the partnership. Prepare any necessary journal entries on the books of the partnership on December 31.

On September 30, a corporation issues 10,000 shares of $5 par value common stock for $30 per share. Prepare any necessary journal entries on September 30.

On September 15, a corporation declares a $100,000 common stock cash dividend. The dividend is paid on October 15.

Prepare any necessary journal entries on September 15.

Prepare any necessary journal entries on October 15.

On August 31, a corporation has the following financial data:

Common stock issued & outstanding 200,000 shares

Par value of common stock $5 per share

Market price of common stock $40 per share

On August 31, the corporation declares 10% stock dividend on common stock. The stock dividends are distributed on September 30.

Prepare any necessary journal entries on August 31.

Prepare any necessary journal entries on September 30.

Prepare any necessary journal entries for the following transactions:

On March 15, the corporation purchases 5,000 shares of its own common stock for $20 per share. The stock has a par value of $1 per share.

On November 15, the company sells 2500 shares of the treasury stock for $22 per share.

Bonus questions (bonus questions cannot hurt your score; they can only help you)

Limited partners have full personal liability for the debts of the partnership. True or false.

It allowable for a partnership to have a negative remainder after allocating salary and interest allowances. True or false.

Stockholders are always employees of a corporation. True or false.

Who in a corporation has the authority to declare dividends?

Are corporate charters issued by a state government or the federal government (pick one)?