Floyd and Merriam Start a Partnership Business on June 12,2019 $$\begin{array} { | l | r | } \hline \text { Floyd } & \$ 51,000 \\\hline \text { Merriam } & 19,000 \\\hline\end{array}$$

question 121

Multiple Choice

Floyd and Merriam start a partnership business on June 12,2019.Their capital account balances as of December 31,2020 stood as follows: $$\begin{array} { | l | r | } \hline \text { Floyd } & \$ 51,000 \\\hline \text { Merriam } & 19,000 \\\hline\end{array}$$ Floyd and Merriam share profits and losses equally.They agreed to dissolve the partnership and start a new one,admitting Ramelow for one-half share in the capital in exchange for land with a market value of $66,000.Which of the following is the correct journal entry to record the introduction of Ramelow as a partner?

• A) \[\begin{array} { | l | c | c | }
• \hline \text { Land } & 66,000 & \\
• \hline \text { Ramelow, Capital } & & 66,000 \\
• \hline
• \end{array}\]
• B) \[\begin{array} { | c | c | c | }
• \hline \text { Floyd, Capital } & 66,000 & \\
• \hline \text { Ramelow, Capital } & & 66,000 \\
• \hline
• \end{array}\]
• C) \[\begin{array} { | c | c | c | }
• \hline \text { Merriam, Capital } & 33,000 & \\
• \hline \text { Floyd, Capital } & 33,000 & \\
• \hline \text { Ramelow, Capital } & & 66,000 \\
• \hline
• \end{array}\]
• D) \(\begin{array}{|l|r|r|}
• \hline \text { Land } & 66,000 & \\
• \hline \text { Merriam, Capital } & 1,000 & \\
• \hline \text { Floyd, Capital } & 1,000 & \\
• \hline \text { Ramelow, Capital } & & 68,000 \\
• \hline
• \end{array}\)

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Definitions:

Market Price

The current exchange rate for an asset or service on the market.

Total Revenue

The total amount of money a firm receives from sales of its products or services.

Perfectly Competitive

A market structure characterized by a large number of small firms, homogeneous products, free entry and exit, and perfect information, leading to an efficient allocation of resources.

Market Price

The ongoing price for acquiring or disposing of goods or services in a market setting.