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1. Buffet and Munger formed a partnership by investing $150,000 and $200,000 respectively. The partnership had a final profit of $70,000. What is the partners profit allocation if it is based on the ratio of their original capital investments?

Select one:

Buffet $35,000 and Munger $35,000

Buffet $30,000 and Munger $40,000

Buffet $175,000 and Munger $175,000

Buffet $150,000 and Munger $200,000

2.

What is the dividend paid to shareholders if:

Profit for the year is $80,000

Opening balance of retained earnings is $100,000

Closing balance of retained earnings is $150,000

Select one:

$50,000

$30,000

$100,000

$80,000

3.

Alex and Oliver formed a partnership by investing $220,000 and $180,000 respectively. The partnership had a final profit of $50,000. The partners agree to recognise a $10,000 p.a. salary allowance to Alex and a $8,000 p.a. salary allowance to Oliver. Each partner is entitled to 5% interest on their original investment, any remaining profit is to be shared equally.

What is the profit allocation to Alex and Oliver?

Select one:

Alex $27,000 Oliver $23,000

Alex $23,000 Oliver $27,000

Alex $25,000 Oliver $25,000

None of the above

4.

Buffet and Munger formed a partnership by investing $400,000 and $250,000 respectively. The partnership had a final profit of $120,000. What is journal entry to record the allocation of profit assuming Buffet and Munger agree to a 70:30 sharing of profits? (Use method 1)

Select one:

DR Buffet, Cash $84,000 DR Munger, Cash 36,000 CR Profit distribution $120,000

DR Profit distribution $120,000 CR Buffet, Capital $84,000 CR Munger, Capital $36,000

DR Buffet, Capital $84,000 DR Munger, Capital $36,000 CR Profit distribution $120,000

DR Profit distribution $120,000 CR Buffet, Cash $84,000 CR Munger, Cash $36,000

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