Question 21 Frodo, Sam, and Merrys partnership calls for the following allocation of income: Frodo and Merry are to receive lump sum salary payments of
Question 21
Frodo, Sam, and Merrys partnership calls for the following allocation of income: Frodo and Merry are to receive lump sum salary payments of $10,000 each, Sam and Merry are to receive interest of 10% of their ending capital balances, if theres a profit Frodo is to receive a bonus equal to 20% of the profit, and any remaining income is to be split between Frodo, Sam, and Merry 50%, 20%, and 30% respectively. Frodo, Sam, and Merrys ending capital balances were $50,000, $300,000, and $100,000 respectively. If there was a partnership net loss of <$100,000>, how much was allocated to Frodo in total?
Question 21 options:
Question 22Frodo, Sam, Merry, and Pippen are in a partnership together and each have capital balances of $100,000. A new partner, Bilbo, pays each partner $50,000 directly for a 1/5 interest in the new partnership. The journal entry on the books of the partnership to account for this transaction would be:
Question 22 options: | A) | Debit Cash $200,000; Credit Capital-Bilbo $80,000, Gain on New Partner $120,000 |
|
| B) | Debit Cash $200,000; Credit Capital-Bilbo $200,000 |
|
| C) | Debit each of the existing partners capital accounts $20,000 each; Credit Capital-Bilbo $80,000 |
|
| D) | No entry is made on the partnerships books as the transaction was made directly between the partners |
|
Question 23 Frodo, Sam, Merry, and Pippen are in a partnership together and have a combined capital balance of $700,000. A new partner, Bilbo, pays the partnership $300,000 directly for a 1/5 interest in the new partnership. The partnership chooses the bonus method to existing partners to account for this transaction and will allocate any bonus evenly amongst the existing partners. The journal entry on the books of the partnership to account for this transaction would be:
Question 23 options: | A) | Debit Cash $300,000; Credit Capital-Bilbo $300,000 |
|
| B) | Debit each of the existing partners capital accounts $75,000 each; Credit Capital-Bilbo $300,000 |
|
| C) | Debit each of the existing partners capital accounts $50,000 each; Credit Capital-Bilbo $200,000 |
|
| D) | Debit Cash $300,000; Credit Capital-Bilbo $200,000, Credit each of the existing partners capital accounts $25,000 each |
|
Question 24 Frodo, Sam, Merry, and Pippen are in a partnership together and have a combined capital balance of $700,000. A new partner, Bilbo, pays the partnership $300,000 directly for a 1/5 interest in the new partnership. The partnership chooses the goodwill method to existing partners to account for this transaction and will allocate any increase in implied value evenly amongst the existing partners. The journal entry on the books of the partnership to account for this transaction would be:
Question 24 options: | A) | Debit Goodwill $300,000, Debit Cash $800,000; Credit each of the existing partners capital accounts $200,000 each, Credit Capital-Bilbo $300,000 |
|
| B) | Debit Cash $300,000, Debit Goodwill $800,000; Credit each of the existing partners capital accounts $200,000 each, Credit Capital-Bilbo $300,000 |
|
| C) | Debit Goodwill $400,000, Debit Cash $800,000; Credit each of the existing partners capital accounts $200,000 each, Credit Capital-Bilbo $400,000 |
|
| D) | A Debit Cash $300,000, Debit Goodwill $400,000; Credit each of the existing partners capital accounts $100,000 each, Credit Capital-Bilbo $300,000 |
|
Question 25 Frodo, Sam, Merry, and Pippen are in a partnership together and have a combined capital balance of $700,000. A new partner, Bilbo, pays the partnership $100,000 directly for a 1/5 interest in the new partnership. The partnership chooses the bonus method to the new partner to account for this transaction and will allocate any bonus evenly fro, the existing partners. The journal entry on the books of the partnership to account for this transaction would be:
Question 25 options: | A) | Debit Cash $160,000; Credit Capital-Bilbo $160,000 |
|
| B) | Debit Cash $100,000, debit each of the existing partners capital accounts $25,000 each; Credit Capital-Bilbo $200,000 |
|
| C) | Debit Cash $100,000; Credit Capital-Bilbo $100,000 |
|
| D) | Debit Cash $100,000, debit each of the existing partners capital accounts $15,000 each; Credit Capital-Bilbo $160,000 |
|
