CMPC 131 Midterms Quiz 2: Theories

Select the best answer for every question

During liquidation, a partners’ capital account balance drops below zero. What should happen?
The partner with a deficit should contribute enough assets to offset the deficit balance.
The deficit balance should be removed from the accounting records with only the remaining partners sharing in
future gains and losses.
The other partners should file a legal suit against the partner with the deficit balance.
The partner with the highest capital balance should contribute sufficient assets to eliminate the deficit.

In the liquidation of a partnership, a loan payable to a partner:

May be offset against that partners’ capital account balance before liquidation commences.
Must be closed to that partners’ drawing account.
Will not advance the time of payment to that partner during the liquidation.
Has the same priority as amounts payable to outside creditors of the partnership.

If the total debits in the statement of realization and liquidation exceeds the total credits, there is
either net gain for the period
net loss for the period
net gain for the period
none of these

A joint arrangement in which the assets and liabilities relating to the arrangement are held in a
separate vehicle can be:
Either joint venture or joint operation
Joint venture
Joint operation
Neither joint venture nor joint operation

If cash payments to partners of a partnership in liquidation are delayed until all noncash assets
have been realized, any cash remaining after all partnership creditors have been paid is distributed
In some other manner
According to the liquidator’s best judgment
In the ratio for sharing net income and losses
In amounts equal to the partners’ loan and capital account balances

LONG PROBLEM
Write your solution in good accounting form on any clean paper (better if you have a worksheet) and take a photo or scan your
paper then submit it as ONE PDF file. WRITE YOUR NAME FOR EVERY PROBLEM (Before the company name) a deduction
of 3 points will be given for those who will not follow. Do not forget to ENCIRCLE your final answer.
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29,995

Your answer

270000

Your answer
 120,000

Your answer

3,200,000

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 240

Your answer

368

Your answer
 27,900

Your answer

28

Your answer

52.33%