SELECT THE BEST ANSWER (Show explanation) 1. Which of the following is characteristic of a general partnership? a. The partners have co-ownership of partnership property. b. The partnership is subject to federal income tax. c. The partnership has an unlimited life. d. The partners have limited liability. 2. Which of the following is not a characteristic of a general partnership? a. the partnership is created by a contract b. mutual agency c. partners share equally in net income or net losses unless an agreement states differently d. dissolution occurs only when all partners agree 3. Which of the following is an advantage of a general partnership when compared to a corporation? a. The partnership is more likely have a net income. b. The partnership is relatively inexpensive to organize. c. Creditors to a partnership cannot attach personal assets of partners. d. The partnership usually hires professional managers. 4. Which of the following is a disadvantage of a partnership when compared to a corporation? a. The partnership is more likely to have a net loss. b. The partnership is easier to organize. c. The partnership is less expensive to organize. d. The partnership has limited life. 5. An advantage of the partnership form of business organization is a. unlimited liability b. mutual agency c. ease of formation d. limited life 6. The characteristic of a partnership that gives the authority to any partner to legally bind the partnership and all other partners to business contracts is called a. unlimited liability b. ease of formation c. mutual agency d. dissolution 7. When a limited partnership is formed a. the partnership activities are limited b. all partners have limited liability c. some of the partners have limited liability d. none of the partners have limited liability 8. Which of the following below is not one of the four major forms of business entities that are discussed in this chapter? a. Sole proprietorship b. Corporation c. Partnership d. Subchapter S corporation 9. Which of the following below is not a characteristic of a Limited Liability Company? a. unlimited life b. limited legal liability c. taxable d. moderate ability to raise capital 10. The operating agreement for a Limited Liability Company is sometimes called: a. articles of organization b. articles of partnership c. Schedule C d. the Uniform Partnership Act Problems: (Computations are required) 1. Barton and Fallows form a partnership by combining the assets of their separate businesses. Barton contributes accounts receivable with a face amount of $50,000 and equipment with a cost of $190,000 and accumulated depreciation of $100,000. The partners agree that the equipment is to be priced at $85,000, that $3,500 of the account receivable is completely worthless and are not to be accepted by the partnership, and that $1,500 is a reasonable allowance for the uncollectibility of the remaining accounts receivable. Fallows contributes cash of $28,500 and merchandise inventory of $55,500. The partners agree that the merchandise inventory is to be priced at $60,000. Journalize the entries to record in the partnership accounts (a) Barton's investment and (b) Fallows' investment and remember each entry must have an explanation. 2. Emerson and Dakota formed a partnership dividing income as follows: 1. Annual salary allowance to Emerson of $48,000 2. Interest of 8% on each partner's capital balance on January 1 3. Any remaining net income divided equally. Emerson and Dakota had $25,000 and $140,000 respectively in their January 1 capital balances. Net income for the year was $220,000.

Put together an income distribution schedule for Emerson and Dakota. - Problems: 1. Gavin invested $45,000 in the Jason and Kelly partnership for ownership equity of $45,000. Prior to the investment land was revalued to a market value of $320,000 from a book value of $200,000. Jason and Kelly share net income in a 1:2 ratio. a. Provide the journal entry for the revaluation of land. b. Provide the journal entry to admit Gavin. 2. Bobbi and Stuart are partners. The partnership capital of Bobbi is $40,000 and Stuart is $70,000. Bobbi sells his interest in the partnership to John for $50,000. Provide the journal entry to record the admission of John as a new partner. PROBLEM: After discontinuing the ordinary business operations and closing the accounts on September 2020, the ledger of the partnership of Anna, Brian, and Cole indicated the following: Cash $7,500 Noncash Assets 105,000 Liabilities $ 27,500 Anna, Capital 45,000 Brian, Capital 15,000 Cole, Capital 25,000 $112,500 $112,500 The partners share net income and losses in the ratio of 3:2:1. Between, September 7-30, the noncash assets were sold for $150,000, the liabilities were paid, and the remaining cash was distributed to the partners.

Put together a statement of partnership liquidation.