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1. . When a partnership is formed, assets contributed by the partners should be recorded on the partnership booksat their a. book values on the partners' books prior to their being contributed to the partnership b. fair market value at the time of the contribution e. original costs to the partner contributing them d. assessed values for property tax purposes 2 As part of the initial investment, Ray Blake contributes equipment that had originally cost $125,000 and on which accumulated depreciation of $100,000 has been recorded. I the partners agree on a valuation of $29,000 for the contributed equipment, f similar equipment would cost $150,000 to replace and what amount should be debited to the a. $29,000 b. $150,000 c. $125,000 d. $100,000 Johnson contributed equipment, inventory, and $53,000 cash to a partnership. The equipment had a book value of $25,000 and a value of $15,000 due to obsolescence. The partnership also assumed a $12,000 mote payable originally used to purchase the equipment. market value of $28,000. The inventory had a book value of $50,000 but only had a market owed by Hannah that was What amount should be recorded to Hannah's capital account? a. $96,000 b. $84,000 c. $108,000 d. $116,000 4. Luke and John share income and losses in a 2:1 ratio after allowing for salaries of $48,000 to Luke and S60,000 a. Luke, $46,500; John, $46,500 b. Luke, $55,000; John, $38,000 c. Luke, $65,000; John, $28,000 d. Luke, $38,000; John, $55,000 to John. Net income for the partnership is $93,000. Income should be divided as 5. Seth and Rachel have original investments of $50,000 and $100,000, respectively, in a partnership. The articles of partnership include the following provisions regarding the division of net income: interest on original investments at 15%; salary allowances of$24,000 and 20,000, respecti net income of $90,000 is allocated to Seth? ively; and the remainder to be divided equally. How much of the a. $42,750 b. $47,750 c. $45,000 d. $43,250 _chf there is no written agreement as tothe way income will be divided anong partners. a. they will share income and losses equally b. they will share income and losses according to their capital balances c. they will share income and losses according to the time devoted to the business d. there really is no partnership agreement $34,000 before admitting Lambert. After distribution of the bonus, what is Lambert's capital? a. $18,000 b. $20,000 c. $6,667 d. $11,333 8. Bobbi and Stuart are partners. The partnership capital of Bobbi is S40,000 and that of Stuart is S70,000, Bobbi sells his interest in the partnership to John for $$0,000. The journal entry to record the admission of John as a new partner would include a credit to a. John's capital account for $40,000 b. Stuart's capital account for $10,000 e. John's capital account for $50,000 d. John's capital account for $40,000 and a credit to Stuart's capital account for $10,000 . The characteristic of a partnership that gives the authority to any partner to legally bind the partnership and all a. unlimited liability b. case of formation c. mutual agency d. dissolution other partners to business contracts is called 10. Which of the following is a disadvantage of a part a. The partnership is more likely to have a net loss. b. The partnership is easier to organize. c. The partnership is less expensive to organize. d. The partnership has limited life. nership when compared to a corporation

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