Table 12-9 Wally, Willie, and Watson Formed a Partnership Several Years Ago

question 93

Multiple Choice

Table 12-9
Wally, Willie, and Watson formed a partnership several years ago. Wally has decided to withdraw from the partnership. The current capital balances are: Wally, capital, $50,000; Willie, capital, $65,000; and Watson, capital, $100,000. Prior to the withdrawal of Wally, the partners agree to revalue some of the partnership assets. Inventory with a cost of $120,000 has a current market value of $150,000; land with a cost of $50,000 has a current market value of $125,000. Wally, Willie, and Watson share net income and losses in a 3:3:4 ratio. Willie and Watson will share net income in a 3:4 ratio.
-Refer to Table 12-9.The journal entry to record the revaluation of the partnership's assets would include:

• A) debit to Land of $75,000
• B) debit to Inventory of $30,000
• C) credit to Watson, Capital of $42,000
• D) All of these would be included

Apply the variable cost concept in setting prices and calculating desired profits.

Utilize the total cost concept for product pricing and understand its distinction from the variable cost concept.

Identify the profitability of products using contribution margin analysis and the theory of constraints.

Understand the application of activity-based costing in determining product costs and profitability.

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Definitions:

Memory Locations

Specific addresses in a computer’s memory where data is stored.

Different Data Type

Refers to various types of data that a programming language can handle, such as integers, floating-points, characters, etc.

Union

A data structure that allows the storage of different data types in the same memory location.

Memory Locations

Specific addresses within the memory of a computer where data and instructions can be stored and accessed.