Answer to Question #62230 in Accounting for Hafsa

Question

15) Articles of partnership
A. are required to form a partnership by federal law.
B. are a formal written agreement that states the partners’ relationship.
C. may be an oral agreement.
D. Both b and c

18) Allison and Josh are partners in a business. Allison’s capital is $60,000, and Josh’s capital is $100,000. Profits for the year are $80,000. They agree to share profits and losses as follows:

Allison Josh
Salaries $20,000 $40,000
Interest on capital 10% 10%
Remaining profits and losses 3/5 2/5
Allison’s share of the profits before paying salaries and interest on capital is:

A.
$48,000.


B.
$22,000.

C.
$28,000.

D. $28,400.

19) When two proprietors decide to combine their businesses and form a partnership, GAAP usually requires that noncash assets be taken over at their _______ on the date of the partnership.
A. residual value
B. book value
C. fair market value
D. historical cost

Answer 1

15) Articles of partnership
B. are a formal written agreement that states the partners’ relationship.

18) Allison’s share of the profits before paying salaries and interest on capital is:
D. $28,400.

19) When two proprietors decide to combine their businesses and form a partnership, GAAP usually requires that noncash assets be taken over at their
C. fair market value