Question 1

Which of the following describes a joint venture?

Accepted Answer

A joint venture is an association of two or more entities that come together for a specific purpose or to achieve a specific goal. Each entity brings something to the venture, such as expertise or resources, to share the benefits and risks of the venture. Joint ventures can be formed between businesses, individuals, or even countries.

Question 2

Justin and Nicole are forming a partnership.What are some of the factors they should consider in deciding how income might be divided?

Accepted Answer

The answer of Justin and Nicole are forming a partnership.What...

Question 3

Erin,Rachel,and Travis are partners in ERT Company,with average capital balances for the year of $60,000,$80,000,and $40,000,respectively.They share remaining income and losses in a 2:5:3 ratio,respectively,after each receives a $30,000 salary and 10 percent interest on his or her average capital balance.In the journal provided,prepare the entries without explanations to close income or loss into their Capital accounts,assuming (a)net income of $148,000, (b)net income of $28,000,and (c)net loss of $12,000.

Accepted Answer

The answer of Erin,Rachel,and Travis are partners in ERT Company,with...

Question 4

Business organizations that mimic the characteristics of partnerships include

Accepted Answer

Special-purpose entities, limited liability companies, and S corporations all share characteristics with partnerships, such as pass-through taxation and flexible management structures.

Question 5

Brandi and Hunter divide partnership income and losses solely on the basis of their average capital balances.Brandi had $90,000 invested during all of 20x5;Hunter had $60,000 invested from January 1 to September 30,and he invested another $40,000 on October 1.If income was $400,000 during 20x5,how much should each partner receive?

Accepted Answer

The answer of Brandi and Hunter divide partnership income and...

Question 6

Chelsea,Jack,and Connor have a partnership.Chelsea wishes to withdraw from the partnership by removing assets that are greater than her current capital balance.Discuss how this transaction is accounted for on the partnership books.

Accepted Answer

The answer of Chelsea,Jack,and Connor have a partnership.Chelsea wishes to...

Question 7

A limited partnership

Accepted Answer

A limited partnership allows some partners to limit their loss to the amount of his or her investment. This means that they are not personally liable for the debts and obligations of the partnership beyond their investment.

Question 8

Briyanna and Greg form a partnership and invest the following assets and liabilities.Greg's building is subject to a $40,000 mortgage that is not assumed by the partnership.
 In the journal provided prepare the entry to record the formation of the partnership.(Omit explanation. )

Accepted Answer

The answer of Briyanna and Greg form a partnership and...

Question 9

List four advantages and four disadvantages of the partnership form of business.

Accepted Answer

The answer of List four advantages and four disadvantages of...

Question 10

Describe how a dissolution of a partnership is different from a liquidation of a partnership.

Accepted Answer

The answer of Describe how a dissolution of a partnership...

Question 11

Which of the following describes a special-purpose entity?

Accepted Answer

A special-purpose entity is a separate legal entity created by a company for a specific purpose, such as a project or investment, and has a limited life. It is often used to isolate financial risks and liabilities associated with the purpose for which it was created.

Question 12

A __________ is an association of two or more entities for the purpose of achieving a specific goal,such as the manufacture of a product in a new market.

Accepted Answer

A joint venture is a type of partnership in which two or more companies or individuals come together to achieve a specific goal or complete a specific project. The joint venture is typically formed for a limited duration, after which the participating entities may choose to continue or dissolve the partnership. In the case described in the question, a joint venture would be an appropriate choice because the entities are working together to manufacture a product in a new market. The joint venture would provide a legal framework to allow the entities to pool their resources, expertise, and knowledge to achieve their goal.

Question 13

Which of the following describes a limited liability company?

Accepted Answer

A limited liability company is a special type of partnership that restricts the limited partner's possible loss to the amount of his or her investment, providing personal asset protection.

Question 14

Delta and Chen form a partnership and invest the following assets and liabilities

In the journal provided prepare the entry to record the formation of the partnership.(Omit explanation. )

Accepted Answer

The answer of Delta and Chen form a partnership and...

Question 15

Rachel and Dillon divide partnership income and losses solely on the basis of their average capital balances.Rachel had $55,000 invested during all of 20x5;Dillon had $40,000 invested from January 1 to August 31,and he invested another $15,000 on September 1.If income was $160,000 during 20x5,how much should each partner receive?

Accepted Answer

The answer of Rachel and Dillon divide partnership income and...

Question 16

Chelsea,Jack,and Connor have a partnership.Chelsea wishes to withdraw from the partnership by removing assets that represent less than her current capital balance.Discuss how this transaction is accounted for on the partnership books.

Accepted Answer

The answer of Chelsea,Jack,and Connor have a partnership.Chelsea wishes to...

Question 17

There are several types of business organizations that mimic the characteristics of a partnership.Describe two of these business organizations.

Accepted Answer

The answer of There are several types of business organizations...

Question 18

Discuss how each of the following would be recorded in the partner's capital account and why:
a.Trevor invests into the partnership land that he paid $40,000 for 3 years ago.Today,the fair market value of the land is $65,000.
b.Marcela invests into the partnership a building that she paid $24,000 for 2 years ago.The building has a $10,000 mortgage and its fair market value is $18,000.The partnership assumes the mortgage.
c.Courtney invests into the partnership equipment she paid $12,000 for earlier in the year by signing a note payable that the partnership is not assuming.The equipment has a fair market value of $15,000.

Accepted Answer

The answer of Discuss how each of the following would...

Question 19

Warren and Spencer are partners in a drilling operation.Warren purchased a drilling rig to be used in the partnership's operations.Is this purchase binding on Spencer even though he was not involved in it? Explain your answer.

Accepted Answer

The answer of Warren and Spencer are partners in a...

Question 20

Eddie and Lauren are partners in a business.Eddie's original capital contribution was $80,000,and Lauren's was $120,000.They agreed to share profits and losses as follows:

Calculate each partner's share of profits and losses,assuming (a)the profit was $200,000, (b)the profit was $140,000,and (c)the loss was $16,000.

Accepted Answer

The answer of Eddie and Lauren are partners in a...

Quiz 12: Accounting for Partnerships