1. Nate is investing in a partnership with David. Nate contributes as part of hi

Question

1. Nate is investing in a partnership with David. Nate contributes as part of his initial investment, Accounts Receivable of $60,000; an Allowance for Doubtful Accounts of $9,000; and $6,000 cash. The entry that the partnership makes to record Nate's initial contribution includes a a. debit to Allowance for Doubtful Accounts for $9,000 b. credit to Nate, Capital for $57,000 c. debit to Accounts Receivable for $51,000 d. credit to Nate, Capital for $66,000. 2. In the liquidation of a partnership, it is necessary to (1) distribute cash to the partners, (2) sell noncash assets, (3) allocate any gain or loss on realization to the partners, and (4) pay liabilities. These steps should be performed in the following order 3. When preferred stock is cumulative, preferred dividends not declared in a period are distributions of earnings. a. b. considered a liability called dividends in arrears. c. d. never paid. 4. Mozart Company has beginning and ending work in process inventories of $130,000 and $145,000 respectively. If total manufacturing costs are $680,000, what is the total cost of goods manufactured? a. $810,000. b. $825,000. c. $665,000. d. $695,000 5. The purchase of treasury stock a. decreases common stock outstanding. b. decreases common stock authorized c. decreases common stock issued d. has no effect on common stock outstanding. 6. A corporation recognizes a gain or loss a. when bonds are converted into common stock and when they are redeemed before maturity b. only when bonds are converted into common stock c. only when bonds are redeemed before maturity d. when bonds are redeemed at or before maturity. Which one of the following is not a cost element in manufacturing a product? a. Manufacturing overhead b. Direct materials c. Office salaries d. Direct labor 7.

Explanation / Answer

Hey there !!

Let me help you with these MCQs !!

Q1. Correct option is C, let me explain you how...   

Since a New partner is admitted to the firm, the accounting entry for his initial contribution will be

So the Correct option is C, Credit Nate's capital A/C by 57,000.

Q2. The correct option is (A), (2,3,4,1) Let me explain how.

The first step in liquidation process is to Sell Non cash assets.

Next step includes to Allocate Gain/loss between partners.

Then, Liabilities are paid off

After this, Cash is distributedamong the partners.

Q3.   Correct Answer is C

In preference cumulative shares, the dividend is not paid...it accrues annually at a fixed rate..

Q4  Correct Option is C

Because,

Q5. Correct option is A

When a treasury stock is purchased , it reduces the equity ie Common stock by the amount of treasury stock purchased.

Q7. Correct option is C

while manufacturing a product, office salaries are not part of rhe cost element...since these are administration expenses and are not related to manufacturing of product in any way....

I hope the above solutions are clear to you..... do let me know if you have any other queries....all the best !! happy studying :)

Accounts Receivable       Dr        60,000 Cash A/c                                Dr           6,000 To Nate's Capital A/c        57,000 To Allowance for Debtors           9,000

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