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COMPLETION STATEMENTS               195.Partnership ______________ occurs whenever a partner withdraws or a new partner is admitted.               196.A partnership characteristic which enables each partner to act on behalf of the partnership when engaging in partnership business is called ______________.               197.A major disadvantage of the partnership form of organization is ______________, which makes.
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a128.Jill and Smita have partnership capital account balances of $1,056,000 and $792,000, respectively and share profits and losses equally. Sierra is admitted to the partnership by investing $440,000 for a one-fourth ownership interest. The balance of Smita’s Capital account after Sierra is admitted is a.$726,000. b.$792,000. c.$858,000. d.$572,000. a129.The admission of a new partner to.
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Ex. 174 Rowlands Corporation has 100,000 shares of $40 par value preferred stock authorized. During the year, it had the following transactions related to its preferred stock. (a)Issued 20,000 shares at $55 per share. (b)Issued 10,000 shares for equipment having a $700,000 asking price. The stock had a market value of $75 per.
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Ex. 170 The stockholders’ equity section of Fauberg Marigny Corporation at December 31 is as follows. FAUBERG MARIGNY CORPORATION Balance Sheet (partial) Paid-in capital Preferred stock, cumulative, 10,000 shares authorized, 5,000 shares issued and outstanding              $ 300,000 Common Stock, no par, 750,000 shares authorized, 300,000 shares issued                1,500,000 Total paid-in capital              1,800,000 Retained earnings                2,050,000 Total paid-in capital.
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S-A E  212(Ethics) Three doctors, Marshall Murrey, Andrew Shaw, and Austin Taylor, opened a family medicine clinic. All three doctors had been lifelong friends. All belonged to the same religious faith. All were very active in church affairs, and tried to mold their professional behavior to their religious beliefs. About a year.
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Ex. 176 Carraway and Boos have a partnership agreement which includes the following provisions regarding sharing net income or net loss: 1.A salary allowance of $48,000 to Carraway  and $36,000 to Boos. 2.An interest allowance of 10% on capital balances at the beginning of the year. 3.The remainder to be divided 60% to Carraway.
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118.In liquidation, balances prior to the distribution of cash to the partners are: Cash $204,000; Paley, Capital $112,000; Stengel, Capital $104,000, and King, Capital $12,000 deficiency. The income ratio is 6:2:2, respectively. How much cash should be distributed to Stengel if King does not pay his deficiency? a.$98,000 b.$101,000 c.$95,000 d.$104,000 119.Use the following account.
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Ex. 179 Juanita Gomez and Brandi Toomey have formed the GT Partnership, and have capital balances of $130,000 and $100,000, respectively, on January 1, 2017. On June 1, 2017, Toomey invested an additional $30,000. Also during the year, Gomez withdrew $60,000 and Toomey withdrew $48,000. Sales for the year amounted to.
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MULTIPLE CHOICE QUESTIONS 37.Which one of the following is a privately held corporation? a.Intel b.General Electric c.Caterpillar Inc. d.Cargill Inc. 38.The dominant form of business organization in the United States in terms of dollar sales volume, earnings, and employees is a.the sole proprietorship. b.the partnership. c.the corporation. d.not known. 39.Under the corporate form of business organization a.a stockholder is personally liable for.
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Ex. 173 The stockholders' equity section of Makoto Corporation's balance sheet at December 31, 2016, appears below: Stockholders' equity Paid-in capital Common stock, $10 par value, 400,000 shares authorized;    250,000 issued and outstanding$2,500,000 Paid-in capital in excess of par  1,200,000 Total paid-in capital3,700,000 Retained earnings     600,000 Total stockholders' equity$4,300,000 During 2017, the following stock transactions occurred: Jan.18Issued 50,000 shares.
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EXERCISES Ex. 170 Michelle Hamilton and Bill Rossi decide to form a partnership. Hamilton invests $35,000 cash and accounts receivable of $30,000 less allowance for doubtful accounts of $2,000. Rossi contributes $25,000 cash and equipment having a $6,000 book value. It is agreed that the allowance account should be $3,000 and the.
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S-A E 210 Are the financial statements of a partnership similar to those of a proprietorship? Discuss. S-A E 211 A partnership is liquidated by selling the non-cash assets, paying the creditors in full, and distributing the remaining assets to the partners. Explain why gains and losses on the realization of non-cash assets.
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EXERCISES Ex. 163 The following selected transactions pertain to L. Lewis Corporation: Jan.3Issued 100,000 shares, $10 par value, common stock for $25 per share. Feb.10Issued 6,000 shares, $10 par value, common stock in exchange for special purpose equipment. L. Lewis Corporation's common stock has been actively traded on the stock exchange at $30 per.
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Ex. 187 The HK Partnership is liquidated when the ledger shows: Cash$60,000  Noncash Assets90,000 Liabilities44,000 Howell, Capital100,000 Kenton, Capital6,000 Henson and Kaenzig income ratios are 3:2, respectively. Instructions Prepare a schedule of cash payments, assuming that the noncash assets were sold for $65,000. Assume that any partner’s capital deficiencies cannot be paid to the partnership.   .
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Ex. 168 1.Name at least three factors that influence the market value of stock. 2.Corporations acquire treasury stock for a variety of purposes. Name three reasons why treasury stock may be acquired by a corporation. Ex. 169 The following items were shown on the balance sheet of Westwind Corporation on December 31, 2017: Stockholders’ equity Paid-in.
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a148.On November 30, capital balances are Ross $300,000, Ellis $250,000 and Gise $250,000. The income ratios are 20%, 20% and 60%, respectively. Ross decides to retire from the partnership. In order for Ellis and Gise to have equal capital interests after the retirement of Ross, how much partnership cash would.
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21.Preferred stock has contractual preference over common stock in certain areas. 22.Preferred stockholders generally do not have the right to vote for the board of directors. 23.Dividends in arrears on cumulative preferred stock are considered a liability. 24.Treasury stock is a contra stockholders' equity account. 25.The number of common shares outstanding can never be.
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67.A corporation has the following account balances: Common stock, $1 par value, $30,000; Paid-in Capital in Excess of Par, $650,000. Based on this information, the a.legal capital is $680,000. b.number of shares issued is 30,000. c.number of shares outstanding is 680,000. d.average price per share issued is $11.25. 68.The authorized stock of a corporation a.only reflects.
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Ex. 174 The Jamison and Stephens partnership reports net income of $50,000. Partner salary allowances are Jamison $18,000 and Stephens $12,000. Any remaining income is shared 60:40. Instructions Determine the amount of net income allocated to each partner. Ex. 175 Ando, Dadd, and Porter formed a partnership on January 1, 2017. Ando invested $60,000, Dadd.
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97.Conecuh Manufacturing Corporation purchased 8,000 shares of its own previously issued $10 par common stock for $184,000. As a result of this event, a.Conecuh’s Common Stock account decreased $80,000. b.Conecuh’s total stockholders’ equity decreased $184,000. c.Conecuh’s Paid-in Capital in Excess of Par account decreased $104,000. d.All of these answer choices are correct. 98.A corporation purchases.
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77.If stock is issued for less than par value, the account a.Paid-In Capital in Excess of Par is credited. b.Paid-In Capital in Excess of Par is debited if a debit balance exists in the account. c.Paid-In Capital in Excess of Par is debited if a credit balance exists in the account. d.Retained Earnings is.
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aEx. 191 Kim Locke and Mary Leigh Coker have capital accounts of $420,000 and $480,000, respectively. Jeff Doggett and Danny Cambrey are to join the partnership. Doggett invests $425,000 in the partnership for which he receives a capital credit of $425,000. Cambrey purchases a one-half interest from Locke for $300,000 and.
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Ex. 178 The adjusted trial balance of the Ricci and Napoli Partnership for the year ended December 31, 2017, appears below: RICCI AND NAPOLI PARTNERSHIP Adjusted Trial Balance December 31, 2017    Debit Credit Current Assets.............................................19,000 Plant Assets...............................................80,000 Current Liabilities...........................................7,000 Long-term Debt.............................................40,000 Ricci, Capital...............................................20,000 Ricci, Drawings.............................................4,000 Napoli, Capital............................................18,000 Napoli , Drawings...........................................7,000 Sales Revenue..............................................110,000 Cost of Goods Sold..........................................62,000 Operating Expenses..........................................  23,000      195,000195,000 The partnership agreement stipulates that a division.
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Ex. 180 Actor, Brees, and Cotswald are forming The ABC Partnership. Actor is transferring $40,000 of personal cash and equipment worth $38,000 to the partnership. Brees owns land worth $27,000 and a small building worth $112,000, which he transfers to the partnership. There is a long-term mortgage of $40,000 on the.
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BRIEF EXERCISES BE 160 Draper and Becker decide to organize a partnership. Draper invests $25,000 cash, and Becker contributes $5,000 and equipment having a book value of $7,000 and a fair value of $15,000. Instructions Prepare the entry to record each partner’s investment. BE 161 Sonoma Company and Woodberry Company decide to merge their proprietorships into.
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BE 165 Appalachian Company at December 31 has cash $40,000, noncash assets $200,000, liabilities $110,000, and the following capital balances: Hoffman $90,000 and Mena $40,000. The firm is liquidated, and $220,000 in cash is received for the noncash assets. Hoffman and Mena income ratios are 60% and 40%, respectively. Instructions Prepare a cash.
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11.A corporation can issue more shares than it is authorized in its charter, if the board of directors approves of an increase in the number of authorized shares. 12.The market value of a corporation's stock is determined by the number of shares that the corporation has been authorized to issue. 13.Each stockholder.
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aEx. 194 Elam, Kamins, and Rubio have capital balances of $150,000, $100,000, and $75,000, respectively, and their income ratios are 4:2:4. Instructions Record the withdrawal of Rubio from the partnership under each of the following assumptions: 1.Rubio is paid $75,000 from partnership assets. 2.Rubio is paid $93,000 from partnership assets. 3.Rubio is paid $60,000 from partnership.
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Ex. 185 The MFP Partnership is to be liquidated when the ledger shows the following: Cash$  50,000 Noncash Assets200,000 Liabilities50,000 Mossimo, Capital75,000 Fandango, Capital100,000 Plank, Capital25,000 Mossimo, Fandango, and Plank’s income ratios are 6:3:1, respectively. Instructions Prepare separate entries to record the liquidation of the partnership assuming that the noncash assets are sold for $140,000 in cash. Ex. 186 Prior to the.
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TRUE-FALSE STATEMENTS 1.A corporation is not an entity which is separate and distinct from its owners. 2.A corporation can be organized for the purpose of making a profit or it may be not-for-profit. 3.A corporation acts under its own name rather than in the name of its stockholders. 4.If a corporation pays taxes on.
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137.Additional paid-in capital includes all of the following except a.paid-in capital from treasury stock. b.paid-in capital in excess of par. c.paid-in capital in excess of stated value. d.paid-in capital in excess of book value. 138.Which of the following is an incorrect statement about a corporation? a.A corporation is an entity separate and distinct from its owners. b.Creditors.
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a138.A bonus to a new partner a.is prohibited by GAAP. b.results when the new partner's capital credit is less than his or her investment of assets in the firm. c.may occur when recorded book values are lower than market values. d.results when the new partner's capital credit is greater than his or her investment.
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Ex. 165 Prytania Corporation is authorized to issue 1,000,000 shares of $5 par value common stock. During 2017, its first year of operation, the company has the following stock transactions. Jan. 1Paid the state $5,000 for incorporation fees. Jan.15Issued 500,000 shares of stock at $6 per share. Jan.30Attorneys for the company accepted 500 shares.
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S-A E  213(Communication) Walter Bector and Sandy Melos began detail work on automobiles as a hobby. First, they used a mail-order kit to add "pin striping" to their own cars, a 1968 Mustang and a 1970 GTO Judge, respectively. Then Walter added more flourishes, including his name. Sandy practiced painting flames.
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57.Which of the following statements is not considered a disadvantage of the corporate form of organization? a.Additional taxes b.Government regulations c.Limited liability of stockholders d.Separation of ownership and management 58.What is ordinarily the first step in the formation of a corporation? a.Development of by-laws for the corporation b.Issuance of the corporate charter c.Application for incorporation to the appropriate.
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107.Taylor Corporation issues 20,000 shares of $50 par value preferred stock for cash at $90 per share. The entry to record the transaction will consist of a debit to Cash for $1,800,000 and a credit or credits to a.Preferred Stock for $1,800,000. b.Preferred Stock for $1,000,000 and Paid-in Capital in Excess of.
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SHORT-ANSWER ESSAY QUESTIONS S-A E 208 Identify and explain the principal characteristics of the partnership form of business organization. S-A E 209 Castle and Berry are discussing how income and losses should be divided in a partnership they plan to form. What factors should be considered in determining the division of net income or.
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aEx. 189 Hu, Marcos, and Letterman share income on a 6:3:1 basis. They have capital balances of $80,000, $60,000, and $45,000, respectively, when Buffett is admitted to the partnership. Instructions Prepare the journal entry to record the admission of Buffett into the partnership if Buffett purchases one-half of Hu’s equity for $45,000; one-half.
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aEx. 188 The Felton and Burchell Partnership has partner capital account balances as follows: Felton, Capital$550,000 Burchell, Capital200,000 The partners share income and losses in the ratio of 60% to Felton and 40% to Burchell. Instructions Prepare the journal entry on the books of the partnership to record the admission of Santos as a new partner.
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BE 160 Orley Company had the following transactions. 1.Issued 5,000 shares of common stock with a stated value of $10 for $130,000. 2.Issued 2,000 shares of $100 par preferred stock at $108 for cash. Instructions Prepare the journal entries to record the above stock transactions. BE 161 On September 5, Bete Gas Corporation acquired 2,500 shares of.
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aEx. 193 Brislin, Humphreys, and Watkins share income and losses in a ratio of 3:2:5, respectively. The capital account balances of the partners are as follows: Brislin Capital$600,000 Humphreys, Capital360,000 Watkins, Capital260,000 aEx. 193(Cont.) Instructions Prepare the journal entry on the books of the partnership to record the withdrawal of Watkins under the following independent circumstances: 1.The partners.
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Ex. 181 The Zhuzer Company at December 31 has cash $50,000, noncash assets $250,000, liabilities $138,000, and the following capital balances: Zhu $112,000 and Zerkel $50,000. The firm is liquidated, and $265,000 in cash is received for the noncash assets. Zhu and Zerkel income ratios are 60% and 40%, respectively. Instructions Prepare the.
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MATCHING 207.Match the items below by entering the appropriate code letter in the space provided. A.Mutual agencyG.Purchase of an interest B.Unlimited liabilityH.Partnership liquidation C.Partnership agreementI.Capital deficiency D.Income ratioJ.Distribution of cash to partners in E.Partners' capital statement liquidation of a partnership. F.Admission by investment _____              1.Each partner is personally and individually liable for partnership debts. _____              2.Made on basis of.
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127.Rubio Corporation began business by issuing 300,000 shares of $5 par value common stock for $25 per share. During its first year, the corporation sustained a net loss of $50,000. The year-end balance sheet would show a.Common stock of $1,500,000. b.Common stock of $7,500,000. c.Total paid-in capital of $7,450,000. d.Total paid-in capital of $1,550,000. 128.Nina.
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BRIEF EXERCISES BE 155 Identify (by letter) each of the following characteristics as being an advantage, a disadvantage, or not applicable to the corporate form of business organization. A = Advantage D = Disadvantage N = Not Applicable Characteristics _____              1.Separate legal entity _____              2.Taxable entity resulting in additional taxes _____              3.Continuous life _____              4.Unlimited liability of owners _____              5.Government regulation _____             .
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117.The acquisition of treasury stock by a corporation a.increases its total assets and total stockholders' equity. b.decreases its total assets and total stockholders' equity. c.has no effect on total assets and total stockholders' equity. d.requires that a gain or loss be recognized on the income statement. 118.Treasury stock should be reported in the financial statements.
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Ex. 184 The ABC Partnership is to be liquidated and you have been hired to prepare a Schedule of Cash Payments for the partnership. Partners Alexa, Bitsy, and Coco share income and losses in the ratio of 4:3:3, respectively. Assume the following: 1.The noncash assets were sold for $70,000. 2.Liabilities were paid in.
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