1. How is share capital related to ownership in corporations?
2. Define partnership dissolution.
3. When does realization take place in a partnership?
4. How is a general partner different from a limited partner?
5. What is a cash dividend?
6. What is limited liability partnership?
7. Why is mutual agency a disadvantage of partnerships?
8. What do you mean by a partnership?
9. Define capital deficiency
10. Give an example of a not-for-profit corporation.

 

I. Any five questions. Your answer must be in paragraph.
1. What are the characteristics of partnership form of organisation?
2. How is the liquidation of a partnership different from the dissolution of a partnership? What are the necessary steps to follow while liquidating a partnership?
3. Corporations can be classified in different ways. For example, they may be classified by purpose or by ownership. Explain the difference between each of these types of classifications.
4. What are the three ownership rights of shareholders?

5. What items should be specified in partnership agreement? Why is it important to have this agreement in writing?
6. Explain the difference between authorized and issued shares. For a corporation, why is the number of authorized shares important?
7. What are the three things to keep in mind for a corporation to pay a cash dividend?

 

 

II. Answer the following question
On January 1, 2014, SlopeBack Ltd. Had a balance of $326,700 in its retained earning account. During the year, it declared $100,000 cash dividends and paid $75,000. Its profit in 2014 was $115,000, calculated as follows:

Sales $425,000
Cost of goods sold $202,500
Selling expenses 75,000
Income tax expense 32,500 310,000
Profit $115,000

a) A statement of retained earning.
b) Make closing entries.
c) Post closing entries to the income summary and retained earning accounts.