a) Tim and Michelle have decided to form a partnership with a 60/40 partnership interest ratio. Tim contributes $7500 cash and merchandise inventory with a market value of $1500. While journalizing this transaction ______. A) Tim, Capital will be debited for $9000 B) Tim, Capital will be credited for $9000 C) Tim, Capital will be credited for $6000 and Michelle, Capital will be credited for $4500 D) Tim, Capital will be debited for $6000 and Michelle, Capital will be debited for $4500 b) Which of the following is TRUE of a partnership balance sheet? A) Each partner's assets will be shown separately. B) Each partner's liabilities will be shown separately. C) Each partner's equity will be shown separately. D) Each partner's assets, liabilities, and equity will be shown separately. c)The sum (or total) of the net income (loss) allocated to each partner should always equal the total net income (loss) of the partnership. -Bill and Bob share profits of their partnership in the ratio of 6:1 respectively. If the net income of the firm is $29,000, calculate Bill's share of net income. (Do not round any intermediate calculations.) A) $20,714 B) $4143 C) $29,000 D) $24,857 d) 7) Steve and Roger allocate 2/3 of their partnership's profits and losses to Steve and 1/3 to Roger. If the net income of the firm is $30,000, calculate Roger's share of net income. (Do not round any intermediate calculations.) A) $20,000 B) $10,000 C) $30,000 D) $25,000
Partnership Accounting
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings, admission of a new partner, etc.
Partner Admission and Withdrawal
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings of a partner, etc.
a) Tim and Michelle have decided to form a partnership with a 60/40 partnership interest ratio. Tim contributes $7500 cash and merchandise inventory with a market value of $1500. While journalizing this transaction ______.
A) Tim, Capital will be debited for $9000
B) Tim, Capital will be credited for $9000
C) Tim, Capital will be credited for $6000 and Michelle, Capital will be credited for $4500
D) Tim, Capital will be debited for $6000 and Michelle, Capital will be debited for $4500
b) Which of the following is TRUE of a partnership
A) Each partner's assets will be shown separately.
B) Each partner's liabilities will be shown separately.
C) Each partner's equity will be shown separately.
D) Each partner's assets, liabilities, and equity will be shown separately.
c)The sum (or total) of the net income (loss) allocated to each partner should always equal the total net income (loss) of the partnership.
-Bill and Bob share profits of their partnership in the ratio of 6:1 respectively. If the net income of the firm is $29,000, calculate Bill's share of net income. (Do not round any intermediate calculations.)
A) $20,714 B) $4143 C) $29,000 D) $24,857
d) 7) Steve and Roger allocate 2/3 of their partnership's
A) $20,000 B) $10,000 C) $30,000 D) $25,000
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