ACC 402 Advanced Accounting Exam 3 (Ch. 9-10) | Questions And Answers Latest {2024-
2025} A+ Graded | 100% Verified
Cherryhill and Hace had been partners for several years, and they decided to admit Quincy to the
partnership. The accountant for the partnership believed that the dissolved partnership and the newly
formed partnership were two separate entities. What method would the accountant have used for
recording the admission of Quincy to the partnership?
A. the bonus method.
B. the equity method.
C. the goodwill method.
D. the cost method. - C. the goodwill method
The disadvantages of the partnership form of business organization, compared to corporations, include
A. the legal requirements for formation.
B. unlimited liability for the partners.
C. the requirement for the partnership to pay income taxes.
D. the extent of governmental regulation. - B. unlimited liability for the partners.
The dissolution of a partnership occurs
A. only when the partnership sells its assets and permanently closes its books.
B. only when a partner leaves the partnership.
C. only when a new partner is admitted to the partnership.
D. when there is any change in the individuals who make up the partnership. - D. when there is any
change in the individuals who make up the partnership.
The partnership of Clapton, Seidel, and Thomas was insolvent and will be unable to pay $30,000 in
liabilities currently due. What recourse was available to the partnership's creditors?
, A. they must present equal claims to the three partners as individuals.
B. they must try obtain a payment from the partner with the largest capital account balance.
C. they cannot seek remuneration from the partners as individuals.
D. they may seek remuneration from any partner they choose. - D. they may seek remuneration from
any partner they choose.
Cleary, Wasser, and Nolan formed a partnership on January 1, 2012, with investments of $100,000,
$150,000, and $200,000, respectively. For division of income, they agreed to (1) interest of 10% of the
beginning capital balance each year, (2) annual compensation of $10,000 to Wasser, and (3) sharing the
remainder of the income or loss in a ratio of 20% for Cleary, and 40% each for Wasser and Nolan. Net
income was $150,000 in 2012 and $180,000 in 2013. Each partner withdrew $1,000 for personal use
every month during 2012 and 2013.
What was Wasser's total share of net income for 2012?
A. $63,000.
B. $53,000.
C. $58,000.
D. $51,000. - A. $63,000
Cleary, Wasser, and Nolan formed a partnership on January 1, 2012, with investments of $100,000,
$150,000, and $200,000, respectively. For division of income, they agreed to (1) interest of 10% of the
beginning capital balance each year, (2) annual compensation of $10,000 to Wasser, and (3) sharing the
remainder of the income or loss in a ratio of 20% for Cleary, and 40% each for Wasser and Nolan. Net
income was $150,000 in 2012 and $180,000 in 2013. Each partner withdrew $1,000 for personal use
every month during 2012 and 2013.
What was Nolan's total share of net income for 2012?
A. $63,000.
B. $53,000.
C. $58,000.
D. $51,000. - C. $58,000
