Partnership

Quiz 1 Answer Key

1. C 11. A 21. D
2. C 12. False 22. A
3. D 13. True 23. C
4. C 14. D 24. B
5. C 15. B 25. C
6. D 16. B 26. D
7. A 17. B 27. D
8. D 18. A 28. D
9. D 19. D 29. B
10. B 20. A 30. B

14. D

Beginning Capital Formula Net Income

Argen, Capital 300,000 (300,000/500,000) x 300,000 180,000
Tina, Capital 200,000 (200,000/500,000) x 300,000 120,000
Total 500,000 300,000

15. B

Ending Capital Formula Net Income

Argen, Capital 350,000 (350,000/600,000) x 300,000 175,000
Tina, Capital 250,000 (250,000/600,000) x 300,000 125,000
Total 600,000 300,000

16. B

Argen, Capital Formula Total

Jan 1 – Jun 29 300,000 x 6 1,800,000
Jun 30 – Sep 30 550,000 x 3 1,650,000
Oct 1 – Dec 31 350,000 x 3 1,050,000
Total 4,500,000
Argen, average capital 4,500,000/12 375,000

Tina, Capital Formula Total

Jan 1 – Mar 31 200,000 x 3 600,000
Apr 1 – Dec 31 250,000 x 9 2,250,000
Total 2,850,000
Tina, average capital 2,850,000/12 237,500

Average Capital Formula Net Income

Argen, Capital 375,000 (375,000/612,500) x 300,000 183,673
 Tina, Capital 237,500 (237,500/612,500) x 300,000 116,327
Total 612,500 300,000

18. A

Alpha Beta Net Income

Interest – 12% 42,000 30,000 72,000
Remainder - equally 114,000 114,000 228,000
Total 156,000 144,000 300,000

19. D

Alpha Beta Net Income

Interest – 12% 42,000 30,000 72,000
Remainder - equally (6,000) (6,000) (12,000)
Total 36,000 24,000 60,000

20. A

Alpha Beta Net Loss

Interest – 12% 42,000 30,000 72,000
Remainder - equally (50,000) (50,000) (100,000)
Total (8,000) (20,000) (28,000)

23. C

Part Ner Ship Net Loss

Interest – 10% 2,000 3,000 0 5,000
Salaries 12,000 12,000 0 24,000
Remainder - equally (15,500) (15,500) 0 (31,000)
Total (1,500) (500) 0 (2,000)

24. B

Good Will Net Income

Interest – 6% 6,000 12,000 18,000
Salaries 14,400 15,400 29,800
Bonus 5,000 5,000
Remainder – equally (1,400) (1,400) (2,800)
Total 19,000 31,000 50,000

25. C

Good Will Net Income

Interest – 6% 6,000 12,000 18,000
Salaries 14,400 15,400 29,800
Bonus 220 220
 Remainder – equally 990 990 1,980
Total 21,390 28,610 50,000

26. D

Good Will Net Income

Interest – 6% 6,000 12,000 18,000
Salaries 14,400 15,400 29,800
Bonus 200 200
Remainder – equally 1,000 1,000 2,000
Total 21,400 28,600 50,000

27. D

Boy Band
Cash 8,000 14,000
Land 120,000
Furniture 7,000
Total 128,000 21,000

28. D

Boy Girl
Unadjusted Capital 2,590,000 2,040,000
Adjustments:
Allowance for doubtful accounts (190,000) (280,000)
Merchandise Inventory (15,000) (20,000)
Equipment 130,000 (85,000)
Adjusted Capital 2,515,000 1,655,000

29. B

Boy Girl Total

Capital Contribution 2,515,000 1,655,000 4,170,000
Capital Credit 2,482,500 1,655,000 4,137,500
Agreed Ratio 60% 40% 100%
Withdrawal (32,500) 0 (32,500)

30. B

Boy Girl Total

Capital Contribution 2,515,000 1,655,000 4,170,000
Agreed Ratio 30% 70% 100%
Capital Credit 1,251,000 2,919,000 4,170,000