1. Partnership Roundtable Activity

2. Station #1: Establishing Questions Give the entries to establish these businesses. #1: Frank, Dean and Sammy enter into a partnership. Each contributes $45,000. #2: Ben, Glen and Ken enter into a partnership. They contributed $30,000, $20,000 and $10,000 respectively. #3: Ron, Don and Jon enter into a partnership. Ron contributes land worth $50,000. Don contributes $1,000 and Jon contributed $30,000 and a vehicle worth $9,000.

3. Station #1: Establishing Solutions #1: Cash135,000 Frank, Capital45,000 Dean, Capital45,000 Sammy, Capital45,000 #2 Cash60,000 Ben, Capital30,000 Glen, Capital20,000 Ken, Capital10,000 #3 Cash31,000 Auto9,000 Land50,000 Ron, Capital50,000 Don, Capital 1,000 Jon, Capital39,000

4. Station #2: Adding (Bonus to Old) Questions #1 A. Duke, D. King and B. Prince are partners with an income ratio of 5:3:2 and $70 000, $45 000 and $28 000 in their capital accounts, respectively. They think that K. Knight would be a good fit in their business. Record the entry of K. Knight if he invests $40 000 in the business for a 15% share, with the bonus going to the existing owners.

5. Station #2: Adding (Bonus to Old) Solutions

6. #1 Kermit and Fozzie are partners. They have capital balances of $30 000 and $20 000 respectively, and have an income ratio of 60% and 40%. They agree to have Gonzo be a new partner. Gonzo invests $10 000 for a 30% share, with the bonus going to the new partner. Give the journal entry to record the addition of the new partner. Station #3: Adding (Bonus to New) Questions

7. Station #3: Adding (Bonus to New) Solutions

8. #1 Orr, Hull and Howe are partners with capital balances of $50 000, $60 000 and $90 000, respectively. They have an income ratio of 3:4:5. Orr decides to leave the partnership. Show the entry to record Orr's departure considering Orr is paid $40 000 from partnership assets, with the bonus to the remaining partners. Station #4: W/D (Bonus to Remaining) Questions

9. Orr, Capital50000 Hull, Capital (10000 x 4/9) 4444 Howe, Capital (10000 x 5/9) 5556 Cash 40000 Station #4: W/D (Bonus to Remaining) Solutions

10. 1.Petters, Minute and Regan are partners, sharing profits at the rates of 60%, 20% and 10%, respectively. Regan, who has $58 000 in her capital account, has decided to leave and start her own business. Record the entry to record her departure, assuming (b) Regan is paid $70 000 with the bonus to the departing partner. Station #5: W/D (Bonus to Leaving) Questions

11. Station #5: W/D (Bonus to Leaving) Solutions

12. 1. Haney, Koolen and Wallen are partners with capital balances of $140 000, $100 000 and $170 000 respectively. They share all profits and losses equally. The partners have decided to close down the business. They manage to liquidate all of the assets at a gain of $60 000. Show the entry to allocate the gain to the partners and the entry to dissolve the business. Station #6: Dissolution Questions

13. Station #6: Dissolution Solutions

14. #1 Payton and Sanders have a partnership with a 5:4 income ratio. The business recorded a net income of $124 000, Show the entry to allocate the net income to the partners' capital accounts. Station #7: Dividing Income (loss) Questions

15. Cash $124,000 Payton (124,000*4/9) $55,111.11 Sanders (124,000*5/9) $68,888.88 Station #7: Dividing Income (loss) Solutions

16. Station #8: Theory Questions 1) Define partnership 2) List 4 advantages and 4 disadvantages of partnerships 3) outline the difference between limited and general partnerships

17. A partnership is an agreement in which two or more people combine resources in a business with a view to making a profit. Advantages of Partnership Ease of formation Low start-up costs Additional sources of investment capital Possible tax advantages Limited regulation Broader management base Disadvantages of Partnership Unlimited liability Divided authority Difficulty in raising additional capital Hard to find suitable partners Possible development of conflict between partners In a general partnership, the owners share the management of a business, and each partner is personally liable for all debts and obligations incurred A limited partnership involves limited partners who combine only capital. They are not as involved in managing the business and cannot be liable for more than the amount of capital they have contributed. This is known as limited liability. Station #8: Theory Solutions