(Note: Question 53 is a Kaplan CPA Review Question)
The condensed balance sheet of Adams & Gray, a partnership, atDecember 31, 20X1, follows:
Current Assets $250,000 Equipment (net) 30,000 TotalAssets $280,000 Liabilities $20,000 Adams, capital 160,000 Gray, capital 100,000 Totalliabilities and capital $280,000
On December 31, 20X1, the fair values of the assets and liabilitieswere appraised at $240,000 and $20,000, respectively, by anindependent appraiser. On January 2, 20X2, the partnership wasincorporated and 1,000 shares of $5 par value common stock wereissued. Immediately after the incorporation, what amount should thenew corporation report as additional paid-in capital?
$215,000
$0
$275,000
$260,000
On a partner's personal statement of financial condition, assetsand liabilities are presented:
I. As current and noncurrent.
II. In order of liquidity and maturity.
Neither I nor II
II
Both I and II
I
18.
(Note: Question 52 is a Kaplan CPA Review Question)
The following balance sheet is for the partnership of Able, Bayer,and Cain which shares profits and losses in the ratio of 4:4:2,respectively.
Assets Cash $20,000 OtherAssets 180,000 $200,000 Liabilities andCapital Liabilities $50,000 Able,Capital 37,000 Bayer,Capital 65,000 Cain,Capital 48,000 $200,000
The original partnership was dissolved when its assets,liabilities, and capital were as shown on the above balance sheetand liquidated by selling assets in installments. The first sale ofnoncash assets having a book value of $90,000 realized $50,000, andall cash available after settlement with creditors was distributed.How much cash should the respective partners receive (to thenearest dollar)?
Able $0; Bayer $3,000; Cain $17,000.
Able $6,667; Bayer $6,667; Cain $6,666.
Able $8,000; Bayer $8,000; Cain $4,000.
Able $0; Bayer $13,333; Cain $6,667.
19.
On a partner's personal statement of changes in net worth, whattype(s) of income is(are) recognized?
I. Realized
II. Unrealized
II only
Neither I nor II
I only
Both I and II
20.
The JKL partnership liquidated its business in 20X9. Due to anexpected long liquidation period, a cash distribution plan wasdeveloped. The initial sale and realization of cash from noncashassets resulted in partner K properly getting $24,000. No otherpartners received cash along with K. Based upon this information,which of the following statements is correct?
I. K's loss absorption power (LAP) was higher than J's LAP and L'sLAP.
II. K's capital balance was substantially larger than the balancesof J and L.
Neither I nor II
I only
II only
Either I or II
(Note: Question 53 is a Kaplan CPA Review Question)
The condensed balance sheet of Adams & Gray, a partnership, atDecember 31, 20X1, follows:
| Current Assets | $250,000 |
| Equipment (net) | 30,000 |
| TotalAssets | $280,000 |
| Liabilities | $20,000 |
| Adams, capital | 160,000 |
| Gray, capital | 100,000 |
| Totalliabilities and capital | $280,000 |
On December 31, 20X1, the fair values of the assets and liabilitieswere appraised at $240,000 and $20,000, respectively, by anindependent appraiser. On January 2, 20X2, the partnership wasincorporated and 1,000 shares of $5 par value common stock wereissued. Immediately after the incorporation, what amount should thenew corporation report as additional paid-in capital?
$215,000
$0
$275,000
$260,000
On a partner's personal statement of financial condition, assetsand liabilities are presented:
I. As current and noncurrent.
II. In order of liquidity and maturity.
Neither I nor II
II
Both I and II
I
18.
(Note: Question 52 is a Kaplan CPA Review Question)
The following balance sheet is for the partnership of Able, Bayer,and Cain which shares profits and losses in the ratio of 4:4:2,respectively.
| Assets | |
| Cash | $20,000 |
| OtherAssets | 180,000 |
| $200,000 | |
| Liabilities andCapital | |
| Liabilities | $50,000 |
| Able,Capital | 37,000 |
| Bayer,Capital | 65,000 |
| Cain,Capital | 48,000 |
| $200,000 |
The original partnership was dissolved when its assets,liabilities, and capital were as shown on the above balance sheetand liquidated by selling assets in installments. The first sale ofnoncash assets having a book value of $90,000 realized $50,000, andall cash available after settlement with creditors was distributed.How much cash should the respective partners receive (to thenearest dollar)?
Able $0; Bayer $3,000; Cain $17,000.
Able $6,667; Bayer $6,667; Cain $6,666.
Able $8,000; Bayer $8,000; Cain $4,000.
Able $0; Bayer $13,333; Cain $6,667.
19.
On a partner's personal statement of changes in net worth, whattype(s) of income is(are) recognized?
I. Realized
II. Unrealized
II only
Neither I nor II
I only
Both I and II
20.
The JKL partnership liquidated its business in 20X9. Due to anexpected long liquidation period, a cash distribution plan wasdeveloped. The initial sale and realization of cash from noncashassets resulted in partner K properly getting $24,000. No otherpartners received cash along with K. Based upon this information,which of the following statements is correct?
I. K's loss absorption power (LAP) was higher than J's LAP and L'sLAP.
II. K's capital balance was substantially larger than the balancesof J and L.
Neither I nor II
I only
II only
Either I or II
