Q&A Hero

Q: ___________________ processing enters and processes data as soon as source documents are available.

Q: _______________________________________ refers to the programs that help managers direct a company's vital operations.

Q: Using __________________ ledgers removes unnecessary details from the general ledger.

Q: A __________________ is an all-purpose journal that can record any transaction.

Q: A __________________ journal is used to record and post transactions of similar type.

Q: ____________________ are the means to take information out of an accounting system and make it available to users.

Q: ____________________ is the accounting system component that keeps data in a form accessible to information processors.

Q: _____________________ are systems that interpret, transform, and summarize information for use in analysis and reporting.

Q: ______________________ capture information from source documents and enable its transfer to the system's information processing component.

Q: ______________________ provide the basic information processed by an accounting system and can include bank statements, billings to customers, and employee earnings records.

Q: The __________________ principle requires that an accounting information system must be able to adapt to changes in the company, business environment, and needs of decision makers.

Q: The __________________ principle requires that an accounting information system conform to a company's activities, personnel, and structure and must adapt to a company's unique characteristics.

Q: The __________________ principle requires that an accounting information system report useful, understandable, timely, and pertinent information for effective decision making.

Q: _____________________________________ consist of people, records, methods and equipment that collect and process data from transactions and events, organize them in useful reports and communicate results to decision makers.

Q: The _____________________ principle requires that an accounting information system aid managers in controlling and monitoring business activities.

Q: The __________________ principle requires that the benefits from an activity in an accounting information system outweigh the costs of that activity.

Q: Williams Company began business on May 1. They use the periodic inventory method. The following transactions involving purchases and cash disbursements occurred during the first week of May: May 2 Purchased $25,000 of merchandise inventory on credit from the Sioux City Company, terms 2/10, n/30. Invoice dated May 1. May 3 Purchased $12,000 of merchandise inventory on credit from the Wichita Company, terms 2/10, n/30. Invoice dated May 2. May 3 Purchased $3,000 of office supplies for cash from Bettendorf Co. Check no. 1267. May 4 Purchased $36,000 of office equipment on credit from Office Outfitters, terms n/60. Invoice dated May 3. May 6 Paid the amount due for the merchandise purchased from Sioux City Company. Check no. 1268. May 6 Purchased $14,500 of merchandise inventory for cash from the Davenport Co. Check no. 1269. a. Use the purchases journal and the cash disbursements journal to record these transactions b. Prepare a schedule of accounts payable as of May 7. There was no accounts payable on May 1. Purchases Journal Date Account Date of Invoice Terms PR Accounts Payable Cr. Purchases Dr. Office Supplies Dr. Other Accounts Dr. Cash Disbursements Journal Date Ck. No. Payee Account Debited PR Cash Cr. Purchase Discount Cr. Other Accounts Dr. Accounts Payable Dr.

Q: 132. Outdoors Unlimited uses special journals to record its daily transactions. They use the perpetual inventory system. Shown below is its cash receipts journal and selected ledger accounts. Post the cash receipts journal to the appropriate ledger accounts. Answer: General Ledger Cash No. 101 Notes Payable No. 250 Date PR Debit Credit Balance Date PR Debit Credit Balance 7/1 4,500 Accounts Receivable No. 106 Sales No. 403 Date PR Debit Credit Balance Date PR Debit Credit Balance 7/1 6,700 7/1 30,000 Inventory No. 109 Sales Discounts No. 405 Date PR Debit Credit Balance Date PR Debit Credit Balance 7/1 15,000 7/1 400 Notes Receivable No. 115 Interest Revenue No. 415 Date PR Debit Credit Balance Date PR Debit Credit Balance 7/1 2,200 Accounts Payable No. 201 Cost of Goods Sold No. 502 Date PR Debit Credit Balance Date PR Debit Credit Balance 7/1 3,450 7/1 18,000 Accounts Receivable Journal Able Co. Bell Co. Date PR Debit Credit Balance Date PR Debit Credit Balance 7/1 4,750 7/1 1,950

Q: 131. The Sun Company completed the following sales and cash receipts transactions during the first week of December. The Sun Company uses the perpetual inventory system. Dec. 1. Sold merchandise for $6,700 on credit to the Two Rivers Co., terms 2/10, n/30. Invoice no. 1455. Cost of the merchandise sold is $3,600. Dec. 1 Sold merchandise for $3,400 on credit to the Berlin Co., terms 2/10, n/30. Invoice no. 1456. Cost of the merchandise sold is $1,800. Dec 2 Sold merchandise for $590 for cash to the Ellison Co. Invoice no. 1457. Cost of the merchandise sold is $300. Dec. 3 Borrowed $10,000 from Custer Bank on a long-term note payable. Dec. 3 Sold merchandise for $7,200 on credit to the Amherst Co., terms 2/10, n/30. Invoice no. 1458. Cost of the merchandise sold is $4,000. Dec. 5 Received the amount due from the Two Rivers Co. from the sale on December 1. Dec. 6 Sold merchandise on credit for $950 to the Waupaca Co., terms 2/10, n/30. Invoice no. 1459. Cost of the merchandise is $500. Dec. 6 Received the amount due from the Berlin Co. from the sale on December 1. a. Use the sales journal and the cash receipts journal to record these transactions. b. Prepare a schedule of accounts receivable. There were no account receivables at December 1. Cash Receipts Journal Date Account Credited Explanation PR Cash Dr. Sales Discount Cr. Accounts Receivable Dr. Sales Cr. Other Accounts Cr. Cost of Goods Sold Dr. Inventory Cr.

Q: Williams Company began business on May 1. They use the perpetual inventory method. The following transactions involving purchases and cash disbursements occurred during the first week of May: May 2 Purchased $25,000 of merchandise inventory on credit from the Sioux City Company, terms 2/10, n/30. Invoice dated May 1. May 3 Purchased $12,000 of merchandise inventory on credit from the Wichita Company, terms 2/10, n/30. Invoice dated May 2. May 3 Purchased $3,000 of office supplies for cash from Bettendorf Co. Check no. 1267. May 4 Purchased $36,000 of office equipment on credit from Office Outfitters, terms n/60. Invoice dated May 3. May 6 Paid the amount due for the merchandise purchased from Sioux City Company. Check no. 1268. May 6 Purchased $14,500 of merchandise inventory for cash from the Davenport Co. Check no. 1269. a. Use the purchases journal and the cash disbursements journal to record these transactions b. Prepare a schedule of accounts payable as of May 7. There were no accounts payable on May 1. Purchases Journal Date Account Date of Invoice Terms PR Accounts Payable Cr. Inventory Dr. Office Supplies Dr. Other Accounts Dr Cash Disbursements Journal Date Ck. No. Payee Account Debited PR Cash Cr. Inventory Cr. Other Accounts Dr. Accounts Payable Dr.

Q: Limited liability partnerships are designed to protect innocent partners from malpractice or negligence claims resulting from the acts of another partner.

Q: Partners in a partnership are taxed on the amounts they withdraw from the partnership, not the partnership income.

Q: Accounting procedures for all items are the same for both C corporations and S corporations in all aspects.

Q: Mutual agency means each partner can commit or bind the partnership to any contract within the scope of the partnership business.

Q: A partnership is an unincorporated association of two or more people to pursue a business for profit as co-owners.

Q: A partnership has an unlimited life.

Q: A _________________________ means that at least one partner has a debit balance in his/her capital account at the point of the final distribution of cash.

Q: If a partner withdraws from a partnership and the recorded value of his or her equity is overstated, then a bonus goes to _____________________; if the recorded value of the withdrawing partner's equity is understated, then a bonus goes to _______________________.

Q: A partner can be admitted into a partnership by ________________________ or by ______________________________.

Q: If partners agree on how to share income, but say nothing about losses, then losses are shared ___________________.

Q: During the closing process, partner's capital accounts are _______________ for their share of net income and _________________ for their share of net loss.

Q: Partner return on equity is calculated as ______________________________.

Q: Partners in a partnership are taxed on _______________________, not on their withdrawals.

Q: A relatively new form of business organization that protects partners with limited liability, allows limited partners to assume an active management role, and is taxed as a partnership is a ______________________________.

Q: A partnership designed to protect innocent partners from malpractice or negligence claims resulting from the acts of other partners is a ____________________________ partnership.

Q: A partnership that has at least two classes of partners, general and limited, that allows the limited partners to have no personal liability beyond the amounts they invest in the partnership, and in which the limited partners have no active role except as specified in the partnership agreement is a ________________________ partnership.

Q: ___________________________ implies that each partner in a partnership can be called on to pay a partnership's debts.

Q: ___________________________ means that partners can commit or bind the partnership to any contract within the scope of the partnership business.

Q: A _____________________ is an unincorporated association of two or more people to pursue a business for profit as co-owners.

Q: Beard, Tanner, Williams are operating as a partnership. The capital account balances at December 31, 2013 are $254,000, $195,000 and $286,000 respectively. Record the entries for the following independent situations. a. The partners vote to admit Sturges. She is going to invest $150,000 for a 15% interest in the partnership. Profit and losses are split equally between the existing partners. b. Sturges agrees to buy 50% of Williams interest by paying him $150,000 directly. c. The partners need new ideas and agree to give Sturges a 20% interest in exchange for $150,000. Profits and losses are shared equally between the existing partners. d. Williams wants to retire and is willing to leave the partnership in exchange for $281,000. Profits and losses were shared on the ratio of 2:3:5.

Q: The BlueFin Partnership agrees to dissolve. The cash balance after selling all assets and paying all liabilities is $60,000. The final capital account balances are: Smith, $35,000; Nagy, $29,000; and Russ, ($4,000). Russ is unable to pay the capital deficiency. Prepare the journal entries to record the transactions required to dissolve this partnership.

Q: The BlueFin Partnership agrees to dissolve. The cash balance after selling all assets and paying all liabilities is $56,000. The final capital account balances are: Smith, $33,000; Nagy, $27,000; and Russ, ($4,000). Russ agrees to pay $4,000 cash from personal funds to settle his deficiency. Prepare the journal entries to record the transactions required to dissolve this partnership.

Q: The BlueFin Partnership agreed to dissolve. The remaining cash balance after liquidating partnership assets and liabilities is $60,000. The final capital account balances are: Smith, $30,000; Nagy, $20,000; and Russ, $10,000. Prepare the journal entry to distribute the remaining cash to the partners.

Q: Conley and Liu allow Lepley to purchase a 25% interest in their partnership for $50,000 cash. Conley and Liu both have capital balances of $55,000 each and have agreed to share income and loss equally. Prepare the journal entry to record the admission of Lepley to the partnership.

Q: Armstrong plans to leave the FAP Partnership. The recorded balance in her capital account is $48,000. The remaining partners, Peters and Floyd, agree to pay Armstrong $58,000 cash. The partners have agreed to share income and loss equally. Prepare the journal entry to record the transaction.

Q: Armstrong plans to leave the FAP Partnership. The recorded value of her capital account is $48,000. The remaining partners, Floyd and Peters, agree to pay Armstrong $40,000 cash. The partners have agreed to share income and loss equally. Prepare the general journal entry to record the withdrawal from the partnership.

Q: Conley and Liu allow Lepley to purchase a 25% interest in their partnership for $35,000 cash. Lepley has exceptional talents that will enhance the partnership. Conley's and Liu's capital account balances are $55,000 each. The partners have agreed to share income or loss equally. Prepare the general journal entry to record the admission of Lepley to the partnership.

Q: Alberts and Bartel are partners. On October 1, Alberts' capital balance is $75,000 and Bartel's capital balance is $125,000. With the partnership's approval, Bartel sells one-half of his partnership interest to Camero for $70,000. Prepare the journal entry to record this transaction in the partnership records.

Q: Armstrong withdraws from the FAP Partnership. The remaining partners agree to buy out her share for her capital balance of $35,000. Prepare the journal entry to record the withdrawal from the partnership.

Q: Marquis and Bose agree to accept Sherman into their partnership. Sherman will contribute $25,000 in cash. Prepare the journal entry to record this transaction.

Q: Khalid, Dina, and James are partners with beginning-year capital balances of $400,000, $320,000, and $160,000, respectively. The partners agreed to share income and loss as follows: salary of $30,000 to Khalid; $50,000 to Dina; and $55,000 to James and an interest allowance of 10% on beginning-of-year capital balances. Any remaining balance is to be divided equally. If partnership net income for the year is $190,000, determine each partner's share and make the appropriate journal entry to close the Income Summary to the capital accounts.

Q: Holden, Phillips, and Rogers are partners with beginning-year capital balances of $120,000, $60,000, and $60,000, respectively. Partnership net income for the year is $84,000. Make the necessary journal entry to close Income Summary to the capital accounts if: a. Partners agree to divide income based on their beginning-year capital balances. b. Partners agree to divide income based on the ratio of 5:3:2 (Holden:Phillips:Rogers), respectively. c. Partnership agreement is silent as to division of income and loss.

Q: Pacos Share Kates Share 1. The partnership contract specifies salary allowances of $45,000 to Paco and $60,000 to Kate, and any balance shared equally. $ $ 2. The partnership contract specifies salary allowances of $45,000 to Paco and $60,000 to Kate with interest allowance of 10% on the partners beginning year capital balance and any remaining balance shared equally. $___________________ $__________________

Q: Paco and Kate invested $99,000 and $126,000, respectively, in a partnership they began one year ago. Assuming the partnership earned $120,000 during the current year, compute the share of the net income each partner should receive under each of these independent assumptions.

Q: Summers and Winters formed a partnership on January 1, 2012. Summers contributed $90,000 cash and equipment with a market value of $60,000. Winters' investment consisted of: cash, $30,000; inventory, $20,000; all at market values. Partnership net income for 2013 and 2012 was $75,000 and $120,000, respectively. Determine each partner's share of the net income for each year, assuming each of the following independent situations: a. Income is divided based on the partners' failure to sign an agreement. b. Income is divided based on a 2:1 ratio (Summers: Winters). c. Income is divided based on the ratio of the partners' original capital investments. d. Income is divided based on partners allowed 12% of the original capital investments, with salaries to Summers of $30,000 and Winters of $25,000 and the remainder to be divided equally. Prepare the journal entry to record the allocation of the 2013 income under alternative (d) above.

Q: Baldwin and Tanner formed a partnership. Baldwins initial capital account balance was $125,000 and Tanners was $105,000. They agreed to share income and loss as follows: Baldwin 40%, Tanner 60%. Income was $102,000 in year 1 and $150,000 in year 2. Assume they each withdrew $10,000 per year. Calculate the capital balances for Baldwin and Tanner at the end of year 2.

Q: Juanita invested $100,000 and Jacque invested $95,000 in a new partnership. They agreed to a $50,000 annual salary allowance to Juanita and a $40,000 annual salary allowance to Jacque. They also agreed to an annual interest allowance of 10% on the partners' beginning-year capital balance, with the balance to be divided equally. Under this agreement, what are the income or loss shares of the partners if the annual partnership income is $102,000?

Q: Durango and Verde formed a partnership with capital contributions of $150,000 and $190,000, respectively. Their partnership agreement called for Durango to receive a $50,000 annual salary allowance. They also agreed to allow each partner a share of income equal to 10% of their initial capital investments. The remaining income or loss is to be divided equally. If the net income for the current year is $120,000, what are Durango's and Verde's respective shares?

Q: Arthur, Barnett and Cummings form a partnership. Arthur contributes $250,000 cash and Barnett contributes $230,000 in cash. Cummings contributes equipment worth $255,000. Prepare the single journal entry to record the formation of this partnership.

Q: Sierra and Jenson formed a partnership. Sierra contributed $25,000 cash and accounts receivable worth $11,000. Jenson's investment included cash, $5,000; inventory, $18,000; and supplies, $1,000. Prepare the journal entries to record each partner's investment in the new partnership.

Q: Kathleen Reilly and Ann Wolf decide to form a partnership on August 1. Reilly invested the following assets and liabilities in the new partnership: Cost/Book Value Market Value Land $75,000 $100,000 Building $250,000 $300,000 Note Payable $198,000 $198,000 The note payable is associated with the building and the partnership will assume the responsibility for the loan. Wolf invested $60,000 in cash and $105,000 in new equipment in the new partnership. Prepare the journal entries to record the two partners original investments in the new partnership.

Q: Active Sports LP is organized as a limited partnership consisting of two partners: Basketball Products LP and Hockey Products LP. Each of the partners sell sporting equipment for their respective sports. Compute the partner return on equity for each limited partnership and for the total limited partnership for the year ended September 30, 2013, using the following data: Basketball Products LP Hockey Products LP Active Sports LP Capital balance at 10/1/12 $870,000 $580,000 $1,450,000 Net income 65,000 35,000 100,000 Cash distribution (40,000) (25,000) (65,000) Capital balance at 9/30/13 $895,000 $590,000 $1,485,000

Q: What are the ways a partner can withdraw from a partnership? Explain how to account for the withdrawal of a current partner from a partnership.

Q: What are the ways that a new partner can be admitted to an existing partnership? Explain how to account for the admission of the new partner under each of these circumstances.

Q: Discuss the options for the allocation of income and loss among partners, including with and without a partnership agreement.

Q: Define the partner return on equity ratio and explain how a specific partner would use this ratio.

Q: Identify and discuss the key characteristics of partnerships. Also, identify nonpartnership organizations that possess the positive aspects of both partnerships and corporations.

Q: Match each of the following terms with the appropriate definitions: _______ A. Statement of changes in partners equity _______ B. Limited partnership _______ C. Limited liability partnership _______ D. Unlimited liability of partners _______ E. Partnership contract _______ F. Partnership _______ G. General partner _______ H. Mutual agency _______ I. C Corporation _______ J. S Corporation 1. An unincorporated association of two or more persons to pursue a business for profit as co-owners. 2. The agreement between partners that sets terms under which the affairs of the partnership are conducted. 3. A financial statement that shows total capital balances at the beginning of the period, any additional investment by partners, the income or loss of the period, the partners' withdrawals and the ending capital balances. 4. The legal relationship among general partners that makes each of them responsible for paying the debts of the partnership if the other partners are unable to pay their shares. 5. A corporation that meets special tax qualifications so as to be treated like a partnership for income tax purposes. 6. A partner who assumes unlimited liability for the debts of the partnership. 7. A corporation that does not qualify for and elect to be treated like a partnership for income tax purposes and therefore is subject to income taxes. 8. A partnership that has two classes of partners, limited partners and general partners. Limited partners have no personal liability beyond the amount they invest in the partnership and have no active role except as specified in the partnership agreement. 9. A partnership that protects innocent partners from malpractice or negligence claims resulting from the acts of another partner. 10. The legal relationship among partners whereby each partner can commit or bind the partnership to any contract within the scope of the partnership's business.

Q: Rodriguez, Sate, and Melton are dissolving their partnership. Their partnership agreement allocates income and losses equally among the partners. The current period's ending capital account balances are Rodriguez, $32,000; Sate, $28,000; and Melton, $(4,000). After all the assets are sold and liabilities are paid, but before any contributions are considered to cover any deficiencies, there is $56,000 in cash to be distributed. Melton pays $2,000 to cover the deficiency in her account. The final distribution of cash would be as follows: A. Rodriquez $30,000 and State $26,000. B. Rodriquez $32,000 and State $26,000. C. Rodriquez $30,000 and State $28,000. D. Rodriquez $30,000 and State $27,000. E. Rodriquez $31,000 and State $27,000.

Q: Rodriguez, Sate, and Melton are dissolving their partnership. Their partnership agreement allocates income and losses equally among the partners. The current period's ending capital account balances are Rodriguez, $30,000; Sate, $30,000; and Melton, $(4,000). After all the assets are sold and liabilities are paid, but before any contributions are considered to cover any deficiencies, there is $56,000 in cash to be distributed. Melton pays $4,000 to cover the deficiency in her account. The general journal entry to record the final distribution would be: A. Rodriguez, Capital.................................... 30,000 Sate, Capital............................................. 30,000 Cash............................................... 60,000 B. Rodriguez, Capital.................................... 28,000 Sate, Capital............................................. 28,000 Cash............................................... 56,000 C. Rodriguez, Capital.................................... 30,000 Sate, Capital............................................. 30,000 Melton, Capital.............................. 4,000 Cash............................................... 56,000 D. Cash......................................................... 56,000 Melton, Capital........................................ 4,000 Rodriguez, Capital........................ 30,000 Sate, Capital................................... 30,000 E. Rodriguez, Capital.................................... 18,667 Sate, Capital............................................. 18,667 Melton, Capital........................................ 18,666 Cash............................................... 56,000

Q: McCartney, Harris, and Hussin are dissolving their partnership. Their partnership agreement allocates each partner 1/3 of all income and losses. The current period's ending capital account balances are McCartney, $13,000; Harris, $13,000; and Hussin, $(2,000). After all assets are sold and liabilities are paid, there is $24,000 in cash to be distributed. Hussin is unable to pay the deficiency. The journal entry to record the distribution should be: A. McCartney, Capital................................. 8,000 Harris, Capital......................................... 8,000 Hussin, Capital........................................ 8,000 Cash............................................... 24,000 B. McCartney, Capital................................. 12,000 Harris, Capital......................................... 12,000 Cash............................................... 24,000 C. McCartney, Capital................................. 13,000 Harris, Capital......................................... 13,000 Hussin, Capital............................. 2,000 Cash............................................... 24,000 D. Cash......................................................... 24,000 Hussin, Capital......................................... 2,000 McCartney, Capital........................ 13,000 Harris, Capital................................ 13,000 E. Cash......................................................... 24,000 McCartney, Capital........................ 8,000 Harris, Capital................................ 8,000 Hussin, Capital................................ 8,000

Q: McCartney, Harris, and Hussin are dissolving their partnership. Their partnership agreement allocates income and losses equally among the partners. The current period's ending capital account balances are McCartney, $15,000, Harris, $15,000, Hussin, $(2,000). After all the assets are sold and liabilities are paid, but before any contributions to cover any deficiencies, there is $28,000 in cash to be distributed. Hussin pays $2,000 to cover the deficiency in his account. The general journal entry to record the final distribution would be: A. McCartney, Capital................................. 15,000 Harris, Capital......................................... 15,000 Cash............................................... 30,000 B. McCartney, Capital................................. 14,000 Harris, Capital......................................... 14,000 Cash............................................... 28,000 C. McCartney, Capital................................. 15,000 Harris, Capital......................................... 15,000 Hussin, Capital.............................. 2,000 Cash............................................... 28,000 D. Cash.......................................................... 15,000 Hussin, Capital......................................... 15,000 McCartney, Capital......................... 2,000 Harris, Capital................................. 28,000 E. McCartney, Capital................................. 9,334 Harris, Capital......................................... 9,333 Hussin, Capital........................................ 9,333 Cash............................................... 28,000

Q: When a partner is unable to pay a capital deficiency: A. The partner must take out a loan to cover the deficient balance. B. The deficiency is absorbed by the remaining partners. C. The partnership ends. D. The deficient partner has no personal liability to pay the deficiency. E. The partnership must be liquidated.

Q: A capital deficiency means that: A. The partnership has a loss. B. The partnership has more liabilities than assets. C. At least one partner has a debit balance in his/her capital account. D. At least one partner has a credit balance in his/her capital account. E. The partnership has been sold at a loss.

Q: When a partnership is liquidated, which of the following is not true? A. Noncash assets are converted to cash. B. Any gain or loss on liquidation is allocated to the partners' capital accounts using the income and loss sharing ratio. C. Liabilities are paid or settled. D. Any remaining cash is distributed to the partners based on their capital balances. E. Any remaining cash is distributed to partners in accordance with the income- and loss-sharing ratio.

Q: Brown and Rubix are partners. Brown's capital balance in the partnership is $73,000 and Rubix's capital balance is $62,000. Brown and Rubix have agreed to share equally in income or loss. Brown and Rubix agree to accept Cabela with a 20% interest. Cabela will invest $41,500 in the partnership. The bonus that is granted to Brown and Rubix equals: A. $3,100 each. B. $6,200 each. C. $35,300 in total. D. $41,500 in total. E. $0, because Brown and Rubix actually grant a bonus to Cabela.

Q: Force and Zabala are partners. Force's capital balance in the partnership is $98,000 and Zabala 's capital balance is $53,000. Force and Zabala have agreed to share equally in income or loss. Force and Zabala agree to accept Burns with a 25% interest. Burns will invest $56,000 in the partnership. Which of the following statements is correct? A. Forces capital balance after the admission of Burns is $50,875. B. Burns capital after admission is $51,750. C. Zabalas capital after the admission of Burns is $98,000. D. Burns capital after admission is $56,000. E. Forces capital balance after the admission of Burns is $53,000.

Q: Force and Zabala are partners. Force's capital balance in the partnership is $98,000 and Zabala 's capital balance is $53,000. Force and Zabala have agreed to share equally in income or loss. Force and Zabala agree to accept Burns with a 25% interest. Burns will invest $56,000 in the partnership. The total bonus that is granted to the existing partners equals: A. $6,500. B. $9,125. C. $2,125. D. $4,250. E. $0, because Force and Zabala actually grant a bonus to Burns.

Q: Tanner, Schmidt, and Hayes are partners with capital account balances of $100,000, $120,000, and $96,000 respectively. They share profits and losses in a 3:4:3 ratio. Schmidt wishes to leave the partnership and will be paid $125,000. What are the remaining capital account balances after Schmidt withdraws? A. Tanner $95,500; Hayes $95,500. B. Tanner $102,500; Hayes $98,500. C. Tanner $100,000; Hayes $96,000. D. Tanner $97,500; Hayes $93,500. E. Tanner $100,000; Hayes $91,000.

Q: Groh and Jackson are partners. Groh's capital balance in the partnership is $64,000 and Jackson's capital balance is $61,000. Groh and Jackson have agreed to share equally in income or loss. Groh and Jackson agree to accept Block with a 25% interest. Block will invest $35,000 in the partnership. The capital account balances after admission of Block are: A. Block $35,000, Groh $64,000, and Jackson $61,000. B. Block $35,000, Groh $66,500, and Jackson $63,500. C. Block $40,000, Groh $64,000, and Jackson $61,000. D. Block $40,000, Groh $61,500, and Jackson $58,500. E. Block $40,000, Groh $66,500, and Jackson $63,500.