(Note: Question 53 is a Kaplan CPA Review Question) The condensed balance sheet of Adams & Gray, a partnership, at December 31, 20X1, follows:

Current Assets	$250,000
Equipment (net)	30,000
Total Assets	$280,000
Liabilities	$20,000
Adams, capital	160,000
Gray, capital	100,000
Total liabilities and capital	$280,000

On December 31, 20X1, the fair values of the assets and liabilities were appraised at $240,000 and $20,000, respectively, by an independent appraiser. On January 2, 20X2, the partnership was incorporated and 1,000 shares of $5 par value common stock were issued. Immediately after the incorporation, what amount should the new corporation report as additional paid-in capital?

$215,000

$0

$275,000

$260,000

On a partner's personal statement of financial condition, assets and liabilities are presented: I. As current and noncurrent. II. In order of liquidity and maturity.

Neither I nor II

II

Both I and II

I

18.

(Note: Question 52 is a Kaplan CPA Review Question) The following balance sheet is for the partnership of Able, Bayer, and Cain which shares profits and losses in the ratio of 4:4:2, respectively.

Assets
Cash	$20,000
Other Assets	180,000
	$200,000
Liabilities and Capital
Liabilities	$50,000
Able, Capital	37,000
Bayer, Capital	65,000
Cain, Capital	48,000
	$200,000

The original partnership was dissolved when its assets, liabilities, and capital were as shown on the above balance sheet and liquidated by selling assets in installments. The first sale of noncash assets having a book value of $90,000 realized $50,000, and all cash available after settlement with creditors was distributed. How much cash should the respective partners receive (to the nearest dollar)?

Able $0; Bayer $3,000; Cain $17,000.

Able $6,667; Bayer $6,667; Cain $6,666.

Able $8,000; Bayer $8,000; Cain $4,000.

Able $0; Bayer $13,333; Cain $6,667.

19.

On a partner's personal statement of changes in net worth, what type(s) of income is(are) recognized? I. Realized II. Unrealized

II only

Neither I nor II

I only

Both I and II

20.

The JKL partnership liquidated its business in 20X9. Due to an expected long liquidation period, a cash distribution plan was developed. The initial sale and realization of cash from noncash assets resulted in partner K properly getting $24,000. No other partners received cash along with K. Based upon this information, which of the following statements is correct? I. K's loss absorption power (LAP) was higher than J's LAP and L's LAP. II. K's capital balance was substantially larger than the balances of J and L.

Neither I nor II

I only

II only

Either I or II