If the partnership had income of $75,000 for its first year of operation, what amount of income (rounded to the nearest thousand) would be credited to Singer's capital account?R. Their partnership agreement allocates income and losses equally among the partners. Hewlett and Martin have agreed to share equally in income or loss. The balance of Maxwell's Capital account will be:Masters, Hardy, and Rowen are dissolving their partnership. After allocating the salary allowances of $32,000 and interest of $16,000, too much net income has been allocated.
In a partnership agreement, if the partners agreed to an interest allowance of 10% annually on each partner's investment, the interest allowance: Is ignored when earnings are not sufficient to pay interest. Unless the member owners elect to be treated otherwise, the Internal Revenue Service will tax the LLC as:Mace and Bowen are partners and share equally in income or loss. The allowance is established in … The allowance is paid to the employees to manage the inflation. Salary allowances usually reflect the relative value of services provided by partners.A partnership that has two classes of partners, general and limited, where the limited partners have no personal liability beyond the amounts they invest in the partnership, and no active role in the partnership, except as specified in the partnership agreement is a:A partner can withdraw from a partnership by any of the following means except:Close the business and liquidate the assets under the mutual agency principle.In the absence of a partnership agreement, the law says that income (and loss) should be allocated based onBloom and Plant organize a partnership on January 1. Hewlett and Martin agree to accept Black with a 25% interest. Which of the following statements is correct regarding the authority of a partner to bind the partnership in dealings with third parties?A partner may be able to legally bind the partnership to actions even if the other partners are unaware of his actions.Wheadon, Davis, and Singer formed a partnership with Wheadon contributing $60,000, Davis contributing $50,000 and Singer contributing $40,000. Dearness Allowance (DA) is an allowance paid to employees as a cost of living adjustment allowance. Is an expense of the business. The bonus that is granted to Black equals:A partner can commit or bind the partnership in any contract within the scope of the partnership business.A partnership designed to protect innocent partners from malpractice or negligence claims resulting from acts of another partner is a(n):Fontaine and Monroe are forming a partnership. Brown invested $200,000 and Freeman invested $150,000 in a partnership. The partnership had net income of $250,000 for the year. Fontaine invests a building that has a market value of $250,000; the partnership assumes responsibility for a $75,000 note secured by a mortgage on the property. Monroe invests $100,000 in cash and equipment that has a market value of $55,000.
The amount credited to Kent's capital account is:The following information is available on PDC Enterprises, a partnership, for the most recent fiscal year:Partnership accounting is the same as accounting for:A sole proprietorship, except that separate capital and withdrawal accounts are kept for each partner.A partnership in which all partners have mutual agency and unlimited liability is called:At least one partner has a debit balance in his/her capital account.Mutual agency implies that each partner in a partnership is a fully authorized agent of the partnership. Assume the same facts as above except change net income to $39,000. Black will invest $35,000 in the partnership. DA is fully taxable with salary. Maxwell is investing a building that has a market value of $180,000. Under this agreement, the shares of the partners when the partnership earns $205,000 in income are:In a partnership agreement, if the partners agreed to an interest allowance of 10% annually on each partner's investment, the interest allowance:Hewlett and Martin are partners. Barber withdrew $90,000 during the year and Atkins withdrew $100,000. They agreed to an interest allowance on the partners' beginning-year capital investments at 10%, with the balance to be shared equally.