Final Review: Ch 12

Final Review: Ch 12

Partnerships

Multiple Choice

A partnership is a ________.

• a firm listed on a stock exchange; no owner owns a majority

• private firm, all owners have equal ownership and limited liability

• corporation, owners have limited liability

• business with 2 or more owners that is not organized as a corporation

Multiple Choice

Marc contributes computer equipment: cost $48,000; Acc Depr $28,000; market value $17,000. What amount is recorded on the partnership's books for the computer equipment?

• $48,000

• $17,000

• $20,000

• $28,000

Multiple Choice

A, B, and C share profit at 1:4:3. If net income is $30,000, calculate Albert's share.

• $7,500

• $11,250

• $15,000

• $3,750

Explanation

A, B, and C share profit at 1:4:3. If net income is $30,000, calculate Albert's share.

Total share = 1+4+3 = 8; Albert: 30,000 x 1/8 = 3,750

Multiple Choice

Kei has a cap balance of $47,000 and Jim has a cap balance of $32,000. Jim sells $15,000 of his ownership to Bill.

• Bill, Capital will be debited for $17,000.

• Jim, Capital will be debited for $17,000.

• Jim, Capital will be credited for $15,000.

• Bill, Capital will be credited for $15,000.