l. Which one of the followingis not a ature of prenhipe? a. Limited life. b. Lim
ID: 2391465 • Letter: L
Question
l. Which one of the followingis not a ature of prenhipe? a. Limited life. b. Limited liability c. Mutual agency. d. Voluntary association. Selling partnership assets and paying the proceeds to creditors and owners refers to a dissolution. b. unlimited liability. c. mutual agency d. liquidation. 2. Partners A and B receive a salary allowance of $63,000 and $81,000, respectively, and share the remainder equally. If the company earned $90,000 during the period, what is the effect on A's capital? a. $63,000 increase. b. $36,000 decrease. c. $36,000 increase. d. $45,000 increase. 3. A invests $60,000 for a one-fifth interest in a partnership in which the other partners have capital totaling $180,000 before admitting A. After distribution of the bonus, what would A's capital be? a. $32,000. b. $36,000. C. $60,000. d. $48,000. 4. 5. B invests $120,000 for a 20 percet interest in a partnership that has total capital of$400.000 after admitting B. Which of the following is true? a. B's capital is $120,000. b. B's capital is $56,000. c. B received a bonus of $40,000. d. The original partners received a bonus of $40,000.Explanation / Answer
1)
Answer is (a) limited life.
2)
Answer is (a) Dissolution.
3)
Profit earned by partnership firm = 90000
Salary paid to both partners = 63000 + 81000 = 144000
Loss recognised in Profit and loss account = Profit earned - Salary paid to both partners = 90000 - 144000 = 54000
Loss shared between both partners A and B = 54000/2 = 27000
Salary credited in A's capital = 63000
Loss debited in A's capital = 27000
Net effect on A's capital = 63000 - 27000 = 36000
Answer is c. $36000 increase
4)
Amount invested by A = 60000
Total capital of other partners before admitting = 180000
Total amount of capital after admitting A = 60000 + 180000 = 240000
A's capital = 240000*1/5 = 48000
Answer is d. $48000
5)
Total capital after admitting = 400000
Share of B's in total capital = 400000*20% = 80000
Investment made by B = 120000
Bonus shares by original partners = 120000 - 80000 = 40000
Answer is d. The original partners received a bonus of $40000.
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