The Trial Balance of WM Partnership Is as Follows

question 11

Multiple Choice

The trial balance of WM Partnership is as follows:
Wilfred and Mike decide to incorporate their partnership.The partnership's books will be closed,and new books will be used for W & M Corporation.The following additional information is available:
1.The estimated fair values of the assets follow:
2.All assets and liabilities are transferred to the corporation.
3.The common stock is $10 par.Wilfred and Mike receive a total of 10,000 shares.
4.The partners share profits and losses in the ratio 7:3.
-Based on the preceding information,the journal entry on W & M Corporation's books to record the assets and the issuance of the common stock will include a credit to Additional Paid-In Capital for:

• A)$0.
• B)$81,000.
• C)$31,000.
• D)$50,000.

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Definitions:

Renunciation

Occurs when either party manifests to the other that he does not wish the agency to continue. This is done by the agent.

Revocation

The act of withdrawing, cancelling, or annulling a legal right, license, or agreement formally and officially.

Personnel Manager

A professional responsible for overseeing the recruitment, training, and welfare of employees.

Management Trainee

A management trainee is an individual in an entry-level position, undergoing training and performing tasks under supervision to learn the skills necessary for management positions.