2) A and B are partners who share income in the ratio of 12 and have capital bal

Question

2) A and B are partners who share income in the ratio of 12 and have capital balances of $40,000 and $70,000 at the time they decide to terminate the partnership. After all noncash assets are sold and all liabilities are paid, there is a cash balance of s80,000. What amount of loss on realization should be allocated to A? a) $10,000 b) $20,000 c) $30,000 d) $80,000 13) F and G are partners who share income in the ratio of 3:2 and have capital balances of $36,000 and $54,000, respectively, at the time they decide to terminate the partnership. After all non-cash assets are sold and all liabilities are paid, there is a cash balance of $60,000. How much cash should be distributed to F? a) S36,000 b) $18,000 c) $24,000 d) S42,000 14)X, Y, and Z are partners, sharing income 1: 2: 3. After selling all of the assets for cash, dividing losses on realization, and paying liabilities, the balances in the capital accounts are as follows: X, S50,000 Credit: Y, $40,000 Debit; and Z, $30,000 Credit. How much cash is available for distribution to the partners? a) $30,000 b) $40,000 c) $90,000 d) $120,000 15) X Company acquired land in exchange for 5,000 shares of its $5 par common stock. The fair market value of the land is not determinable, but the stock is widely traded and sold for $9 per share when exchanged for the land. At what amount should the land be recorded by X Company? a) $5,000 b) $20,000 c) $25,000 d) $45,000 16) A corporation issues 4,000 shares of common stock for $50,000. The stock has a par value of $10 per share. The journal entry to record the stock issuance would include a credit to Common Stock for a) $50,000 b) $10,000 c) $40,000 d) $60,000 17) The outstanding stock is composed of 10,000 shares of $50 par, non-cumulative, preferred $5 stock and 50,000 shares of no-par common stock. Preferred dividends have been paid every year except for the preceding two years (and none so far during the current year). If S240,000 is to be distributed as a dividend for the current year, what total amount will be distributed to the preferred shareholders? a) $50,000 b) $100,000 c) $150,000 d) $40,000

Explanation / Answer

Answer 12 - a. $10,000 Total Capital - $40,000 + $70,000     110,000.00 Cash Balance after All assets are sold & Liabilities are Paid        80,000.00 Loss on realization        30,000.00 A's Share - $30,000 X 1/3        10,000.00 Answer 13-b. $18,000 Total Capital - $36000 + $54,000        90,000.00 Cash Balance after All assets are sold & Liabilities are Paid        60,000.00 Loss on realization        30,000.00 Cash F, Capital G, Capital Balances        60,000.00     36,000.00     54,000.00 Loss on realization                       -   (18,000.00) (12,000.00) Balance        60,000.00     18,000.00     42,000.00 Cash paid to partners     (60,000.00) (18,000.00) (42,000.00) Balance                       -                       -                       -   Answer 14-b. $40,000 X, Capital        50,000.00 Y, Capital     (40,000.00) Z, Capital        30,000.00 Cash Available        40,000.00 Answer 15-d. $45,000 Land - 5,000 Shares X $9        45,000.00

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