Question 1 1. Benson and Orton are partners who share income in the ratio of 2:3 and have capital balances of $60,000 and $40,000, respectively. Ramsey is admitted to the partnership and is given a 40% interest by investing $20,000. What is Benson’s capital balance after admitting Ramsey? | a. | $71,200 |* | b. | $24,000 | | c. | $48,800 | | d. | $20,000 |
10 points
Question 2 1. Carla and Eliza share income equally. For the current year, the partnership net income is $40,000. Carla made withdrawals of $12,000 and Eliza made withdrawals of $21,000. At the beginning of the year, the capital account balances were: Carla capital, $42,000; Eliza capital, $55,000. Eliza’s capital account balance at the end of the year is | a. | $75,000 | | b. | $78,000 | | c. | $34,000 | | d. | $54,000 |*
10 points
Question 3 1. Douglas pays Selena $45,000 for her 30% interest in a partnership with total net assets of $125,000. Following this transaction, Douglas’ capital account should have a credit balance of | a. | $13,500 | | b. | $37,500 |* | c. | $45,000 | | d. | more than $45,000 |
10 points
Question 4 1. Franco and Jason share income and losses in a 2:1 ratio after allowing for salaries of $15,000 and $30,000. If the partnership suffers a $15,000 loss, by how much would Jason’s capital account increase? | a. | $25,000 | | b. | $20,000 | | c. | $40,000 | | d. | $10,000 |*
10 points
Question 5 1. A ratio of 4:2:1 is the same as | a. | 40%:20%:10% | | b. | 4/7:2/7:1/7 |* | c. | 4/10:2/10:1/20 | | d. | 7/4:7/2:7/1 |
10 points
Question 6 1. Benson and Orton are partners who share income in the ratio of 1:3 and have capital balances of $70,000 and $30,000, respectively. Ramsey is admitted to the partnership and is given a 40% interest by investing $20,000. What is Orton’s capital balance after admitting Ramsey? | a. | $9,000 |* | b. | $70,000 | | c. | $63,000 | | d. | $20,000 |
10 points
Question 7 1. Abby and Bailey are partners who share income in the ratio of 2:1 and have capital balances of $60,000 and $30,000, respectively. With the consent of Bailey, Sandra buys one-half of Abby's interest for $35,000. For what amount will Abby's capital account be debited to record admission of Sandra to the partnership? | a. | $40,000 | | b. | $30,000 |* | c. | $15,000 | | d. | $35,000 |
10 points
Question 8 1. A change in the ownership of a partnership results in the | a. | liquidating of the partnership | | b. | realization of the partnership | | c. | dissolution of the partnership |* | d. | consolidating of the partnership |
10 points
Question 9 1. A new partner may be admitted to a partnership by | a. | inheriting a partnership interest | | b. | contributing assets to the partnership |* | c. | a written approval under the federal law | | d. | purchasing a specific quantity of assets from the partnership |
10 points
Question 10 1. Jackson and Campbell have capital balances of $100,000 and $300,000, respectively. Jackson devotes full time and Campbell one-half time to the business. Determine the division of $150,000 of net income when there is no reference to division in partnership agreement.

| a. | $112,500 and $37,500 | | b. | $37,500 and $112,500 | | c. | $100,000 and $50,000 | | d. | $75,000 and $75,000 |*