Question

homeWUIK: Unapter 12 Homework Save Score: 0 of 1 pt 2 of 4 (4 complete HW Score: 44.44%, 1.78 of 4 pts XE12-17 (similar to) Question Help Fritz and Harrigan forma partnership contributing $28.750 and $2,250, respectively. Determine their shares of net income ornet loss for each of the following independent stations (Use a minus sign or parentheses when entering losos) Click on the icon to view the independent shutions) N income foss) Situation Hannigan

Answer 1

Situation a)

In absence of agreement ,profit and losses are shared equally.

	Net income/(loss)
	Fritz	Hannigan	Total
Net loss	-120000*1/2 = -60000	-60000	-120000

Situation b)

Total capital balance :28750+86250 =115000

	Net income/(loss)
	Fritz	Hannigan	Total
Net Income	80000*28750/115000= 20000	80000*86250/115000= 60000	80000

**Distribution of net income = Net income (or loss) * capital of respective partner /Total capital of firm

situation c)

	Net income/(loss)
	Fritz	Hannigan	Total
In capital sharing ratio	78000*28750/115000= 19500	78000*86250/115000= 58500	78000
In % of service	39000*25%= 9750	39000*75%= 29250	39000
Rest equally	13000*1/2= 6500	6500	13000
Total Net income	35750	94250	130000

#Residual income to be shared equally :130000-78000-39000=13000