REFERENCE: Ref.14_01 Cleary,Wasser,and Nolan Formed a Partnership on January 1,2007,with Investments of Investments

question 4

Multiple Choice

REFERENCE: Ref.14_01
Cleary,Wasser,and Nolan formed a partnership on January 1,2007,with investments of $100,000,$150,000,and $200,000,respectively.For division of income,they agreed to (1) interest of 10% of the beginning capital balance each year, (2) annual compensation of $10,000 to Wasser,and (3) sharing the remainder of the income or loss in a ratio of 20% for Cleary,and 40% each for Wasser and Nolan.Net income was $150,000 in 2007 and $180,000 in 2008.Each partner withdrew $1,000 for personal use every month during 2007 and 2008.
-Jell and Dell were partners with capital balances of $600 and $800 and an income sharing ratio of 2:3.They admitted Zell to a 30% interest in the partnership,and the total amount of goodwill credited to the original partners was $700.What amount did Zell contribute to the business?

• A)$560.
• B)$570.
• C)$600.
• D)$590.
• E)$630.

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Definitions:

Direct Labor Budget

A financial plan that estimates the cost of direct labor required to meet production goals within a specific period.

Direct Labor Rate

The cost per hour for direct labor applied to the production of goods or services.

Direct Labor-Hours

The sum of hours spent by workers directly engaged in producing a good or delivering a service.

Schedule of Expected Cash Collections

A financial report that outlines the anticipated inflow of cash from receivables or other income sources over a specific time period.