Ruby and Anita Are Partners

question 69

Multiple Choice

Ruby and Anita are partners.Ruby has a capital balance of $270,000 and Anita has a capital balance of $180,000.Denis invests a building with a current market value of $170,000 to acquire an interest in the new partnership.Which of the following is true of the journal entry to record this transaction? (Assume no bonus to any partner. )

• A)Building will be debited for $170,000,Ruby,Capital and Anita,Capital will be credited for $85,000 each.
• B)Building will be debited for $170,000 and Denis,Capital will be credited for $170,000.
• C)Ruby,Capital and Anita,Capital will be debited for $85,000 each and Denis,Capital will be credited for $170,000.
• D)Ruby,Capital and Anita,Capital will be credited for $85,000 each and Denis,Capital will be debited for $170,000.

Understand and apply the concept of trade discounts.

Calculate trade discount rate given list and net prices.

Calculate list price given the amount of trade discount.

Understand the application of trade discounts in various scenarios (e.g., rebates on purchases, payroll reduction).

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Definitions:

Due Diligence

The investigation or exercise of care that a reasonable business or person is expected to take before entering into an agreement or a financial transaction with another party.

Negotiable Instrument

A document guaranteeing the payment of a specific amount of money, either on demand or at a set time, with the payer named on the document.

Confession of Judgment

A legal agreement in which a debtor permits a creditor to obtain a judgment against them without a trial.

Undertaking

A formal pledge or promise, often in a legal context, indicating an agreement to perform a particular action or task.