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1. The VWX partnership is undergoing an installment liquidation. Partners Victoria, Willow, and Xavier share income in a 3:5:2 ratio. The partnership balance sheet is as follows: Assets Liabilities Cash $ 7,000 Accounts payable $ 20,000 Accounts receivable 10,000 Loan payable-Willow 50.000 Loan receivable-Victoria 13,000 Total liabilities 70,000 Inventory 25,000 Capital Buildings and equipment, net 545,000 Victoria 100,000 Willow 250,000 Xavier 180.000 Total capital 530.000 Total $600.000 Total $600.000 You are preparing a cash distribution plan for the partnership. If $300,000 is available to distribute to the partners, how is it distributed? C A.$172,600 to Willow and $127,400 to Xavier C B.$1,400 to Victoria, $157,600 to Willow, and $141,000 to Xavier C. $23,000 to Victoria, $155,000 to Willow, and $122,000 to Xavier D.$6,900 to Victoria, $166,500 to Willow, and $126,600 to Xavier 2. Nunes, Orta and Paulo are partners providing engineering services. Relevant data regarding income-sharing relationships and capital balances are as follows: Partner Capital Balance Income Share Nunes $ 250,000 20% Orta 180,000 30% Paulo 150,000 0% Totals 580,000 100% Nunes retires and receives $300,000 in cash from the partnership. Partnership identifiable net assets are recorded at amounts approximationg fair value. If the partial goodwill approach is used, Orta's capital balance after Nunes' retirement is: C A. $250,000 B. $180,000C C. $220,000 D.$210,000 3. Nunes, Orta and Paulo are partners providing engineering services. Relevant data regarding income-sharing relationships and capital balances are as follows: Partner Capital Balance Income Share Nunes 6 250,000 20% Orta 180,000 30% |Paulo 150,000 50% Totals 1580.000 100% Orta decides to retire and receives $159,000 in cash from the partnership. If the bonus method is used to account for the retirement, Paulo's capital balance after Orta's retirement is: C A. $135,000 C B. $139,500 C. $160,500 D. $165,000 4. Nunes, Orta and Paulo are partners providing engineering services. Relevant data regarding income-sharing relationships and capital balances are as follows: Partner Capital Balance Income Share Nunes $ 250,000 20% Orta 180,000 30% Paul 150.000 Totals $ 580,000 100% Nunes retires and receives $300,000 in cash from the partnership. Partnership net assets are recorded at amounts approximationg fair value. If the partial goodwill approach is used, goodwill is recognized in the amount of: C A. $ 50,000 C B. $100,000 C C. $250,000 D.$ 10,0005. Liam, Michael and Noah own interests in the LMN Partnership. Their current capital account balances are as follows: Liam $250,000 Michael 300,000 Noah 200,000 Partnership income is shared in a 3:5:2 ratio. Olivia buys a 20% interest in the partnership by acquiring 20% of each existing partner's interest, paying the three partners a total of $175,000. Partnership identifiable net assets are currently reported at amounts approximationg fair value. Using the transfer of capital interests approach, Olivia's initial capital balance after entering the partnership is: C A.$175,000 C B. $170,000 C C. $215,000 D.$150,000
