Chap015 - Chapter 15 Partnerships Formation Operation and...

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Chapter 15 - Partnerships: Formation, Operation, and Changes in Membership Chapter 15 Partnerships: Formation, Operation, and Changes in Membership Multiple Choice Questions 1. A partnership is a(n): I. accounting entity. II. taxable entity. A. I only B. II only C. Neither I nor II D. Both I and II 2. A partner's tax basis in a partnership is comprised of which of the following items? I. The partner's tax basis of assets contributed to the partnership. II. The amount of the partner's liabilities assumed by the other partners. III. The partner's share of other partners' liabilities assumed by the partnership. A. I plus II minus III B. I plus II plus III C. I minus II plus III D. I minus II minus III In the ABC partnership (to which Daniel seeks admittance), the capital balances of Albert, Bert, and Connell, who share income in the ratio of 5:3:2 are: 3. Based on the preceding information, if no goodwill or bonus is recorded, how much should Daniel invest for a 20 percent interest? A. $400,000 B. $200,000 C. $300,000 D. $250,000 15-1
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Chapter 15 - Partnerships: Formation, Operation, and Changes in Membership 4. Based on the preceding information, what amount of goodwill will be recorded if Daniel invests $450,000 for a one-third interest? A. $0 B. $10,000 C. $50,000 D. $100,000 Jones and Smith formed a partnership with each partner contributing the following items: Assume that for tax purposes Jones and Smith agree to share equally in the liabilities assumed by the Jones and Smith partnership. 5. Refer to the above information. What is each partner's tax basis in the Jones and Smith partnership? A. Option A B. Option B C. Option C D. Option D 15-2
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Chapter 15 - Partnerships: Formation, Operation, and Changes in Membership 6. Refer to the above information. What is the balance in each partner's capital account for financial accounting purposes? A. Option A B. Option B C. Option C D. Option D 7. Griffin and Rhodes formed a partnership on January 1, 2009. Griffin contributed cash of $120,000 and Rhodes contributed land with a fair value of $160,000. The partnership assumed the mortgage on the land which amounted to $40,000 on January 1. Rhodes originally paid $90,000 for the land. On July 31, 2009, the partnership sold the land for $190,000. Assuming Griffin and Rhodes share profits and losses equally, how much of the gain from sale of land should be credited to Griffin for financial accounting purposes? A. $0 B. $15,000 C. $35,000 D. $45,000 8. Which of the following accounts could be found in the general ledger of a partnership? A. Option A B. Option B C. Option C D. Option D 15-3
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Chapter 15 - Partnerships: Formation, Operation, and Changes in Membership 9. Which of the following accounts could be found in the PQ partnership's general ledger? I. Due from P
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This note was uploaded on 04/30/2010 for the course ACCT 05544 taught by Professor Hader during the Spring '10 term at Kean.

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Chap015 - Chapter 15 Partnerships Formation Operation and...

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