Homework Answers
| a. | ||||||
| Income Allocation—2016 | Gray | Stone | Lawson | Total | ||
| Hours | 1780 | 1510 | 2000 | |||
| Salary allowance ($8 per billable hour) | $ 14,240.00 | $ 12,080.00 | $ 16,000.00 | $ 42,320.00 | ||
| Interest (working Note A) | $ 34,368.00 | $ 30,000.00 | $ 15,000.00 | $ 79,368.00 | ||
| Bonus (not applicable salary and interest would have negative
balance |
0 | 0 | 0 | 0 | ||
| Remaining loss (split evenly):($80,000 - ($42320+$73,728) | -13896 | -13896 | -13896 | $ (41,688.00) | ||
| Profit allocation | 34712 | 28184 | 17104 | 80000 | ||
| Working Note A: Interest | Gray | Stone | Lawson | |||
| Beginning Capital | $ 280,000.00 | $ 250,000.00 | $ 125,000.00 | |||
| Interest 12% ; Gray = ($280,000 x 12% x 4/12)+($280,00+9,600 )x12% x 8/12) | $ 34,368.00 | $ 30,000.00 | $ 15,000.00 | |||
| Capital Account Balances—1/1/16– 12/31/16 | ||||||
| Gray | Stone | Lawson | Total | |||
| Beginning contributions | $ 280,000.00 | $ 250,000.00 | $ 125,000.00 | $ 655,000.00 | ||
| Added Investment | $ 9,600.00 | $ - | $ - | $ 9,600.00 | ||
| Profit allocation (from above) | $ 34,712.00 | $ 28,184.00 | $ 17,104.00 | $ 80,000.00 | ||
| Drawing (10% of beginning balances) | $ (28,000.00) | $ (25,000.00) | $ (12,500.00) | $ (65,500.00) | ||
| Ending balances | $ 296,312.00 | $ 253,184.00 | $ 129,604.00 | $ 679,100.00 | ||
| Income Allocation—2017 | Gray | Stone | Lawson | Monet | Total | |
| Hours | 2500 | 1700 | 1450 | 1260 | ||
| Salary allowance ($8 per billable hour) | $ 20,000.00 | $ 13,600.00 | $ 11,600.00 | $ 10,080.00 | $ 55,280.00 | |
| Interest (12% x Ending Bal of 2016) | $ 35,557.44 | $ 30,382.08 | $ 15,552.48 | $ 27,164.00 | $ 108,656.00 | |
| Bonus (not applicable salary and interest would have negative
balance |
0 | 0 | 0 | 0 | 0 | |
| Remaining loss (split evenly):(-$27,400 - ($55,280 +$108656 ) | -47834 | -47834 | -47834 | -47834 | $(191,336.00) | |
| Profit allocation | 7723.44 | -3851.92 | -20681.52 | -10590 | -27400 | |
| Working Note B: Monet Capital | ||||||
| Monet's Investment = 25% (679,100 + Monet's Investment) | ||||||
| .75 Monet's Investment = $169,775 | ||||||
| Monet's Investment | $ 226,366.67 | |||||
| Capital Account Balances—1/1/16 – 12/31/16 | ||||||
| Gray | Stone | Lawson | Monet | Total | ||
| Beginning contributions | $ 296,312.00 | $ 253,184.00 | $ 129,604.00 | $ 226,366.67 | $ 905,466.67 | |
| Profit allocation (from above) | $ 7,723.44 | $ (3,851.92) | $ (20,681.52) | $ (10,590.00) | $ (27,400.00) | |
| Drawing (10% of beginning balances) | $ (29,631.20) | $ (25,318.40) | $ (12,960.40) | $ (22,636.67) | $ (90,546.67) | |
| Ending balances | $ 274,404.24 | $ 224,013.68 | $ 95,962.08 | $ 193,140.00 | $ 787,520.00 | |
| Income Allocation—2018 | Gray | Stone | Lawson | Monet | Total | |
| Hours | 1950 | 1690 | 1380 | 1650 | ||
| Salary allowance ($8 per billable hour) | 15600 | 13520 | 11040 | 13200 | 53360 | |
| Interest (12% x Ending Bal of 2017) | 32928.5088 | 26881.6416 | 11515.4496 | 23176.8 | 94502.4 | |
| Bonus (not applicable salary and interest would have negative
balance |
3344.8 | 3344.8 | 0 | 0 | 6689.6 | |
| Remaining loss (split evenly):($188,000 - ($53,360+$94502+$5208.26) | 8362 | 8362 | 8362 | 8362 | 33448 | |
| Profit allocation | 60235.3088 | 52108.4416 | 30917.4496 | 44738.8 | 188000 | |
| Working Note C: Bonus = Grey and stone 10% each ; Total bonus = 20% | ||||||
| Bonus = 20% (Net income – Salary – Interest – Bonus) | ||||||
| Bonus = .20 ($152,800 – $51,120 – $70,430 – Bonus) | ||||||
| Bonus | 6689.6 | |||||
| Bonus per person = $6689.62 | 3344.8 | |||||
| Capital Account Balances—1/1/18 – 12/31/18 | ||||||
| Gray | Stone | Lawson | Monet | Total | ||
| Beginning contributions | $ 274,404.24 | $ 224,013.68 | $ 95,962.08 | $ 193,140.00 | $ 787,520.00 | |
| Profit allocation (from above) | $ 60,235.31 | $ 52,108.44 | $ 30,917.45 | $ 44,738.80 | $ 188,000.00 | |
| Drawing (10% of beginning balances) | $ (27,440.42) | $ (22,401.37) | $ (9,596.21) | $ (19,314.00) | $ (78,752.00) | |
| Ending balances | $ 307,199.12 | $ 253,720.75 | $ 117,283.32 | $ 218,564.80 | $ 896,768.00 | |
| b) | ||||||
| GRAY, STONE, AND LAWSON | ||||||
| Statement of Partners' Capital | ||||||
| For Year Ending December 31, 2018 | ||||||
| Gray | Stone | Lawson | Monet | Total | ||
| Beginning contributions | $ 274,404.24 | $ 224,013.68 | $ 95,962.08 | $ 193,140.00 | $ 787,520.00 | |
| Profit allocation (from above) | $ 60,235.31 | $ 52,108.44 | $ 30,917.45 | $ 44,738.80 | $ 188,000.00 | |
| Drawing (10% of beginning balances) | $ (27,440.42) | $ (22,401.37) | $ (9,596.21) | $ (19,314.00) | $ (78,752.00) | |
| Ending balances | $ 307,199.12 | $ 253,720.75 | $ 117,283.32 | $ 218,564.80 | $ 896,768.00 | |
Add Answer to:
Gray, Stone, and Lawson open an accounting practice on January 1, 2016 in San Diego, California,...
Gray, Stone, and Lawson open an accounting practice on January 1, 2016, in San Diego, California,...
Gray, Stone, and Lawson open an accounting practice on January
1, 2016, in San Diego, California, to be operated as a partnership.
Gray and Stone will serve as the senior partners because of their
years of experience. To establish the business, Gray, Stone, and
Lawson contribute cash and other properties valued at $420,000,
$390,000, and $195,000, respectively. An articles of partnership
agreement is drawn up. It has the following stipulations:
Personal drawings are allowed annually up to an amount equal...
Gray, Stone, and Lawson open an accounting practice on January 1, 2016, in San Diego, California,...
Gray, Stone, and Lawson open an accounting practice on January 1, 2016, in San Diego, California, to be operated as a partnership. Gray and Stone will serve as the senior partners because of their years of experience. To establish the business, Gray, Stone, and Lawson contribute cash and other properties valued at $290,000, $260,000, and $130,000, respectively. An articles of partnership agreement is drawn up. It has the following stipulations: Personal drawings are allowed annually up to an amount equal...
Gray, Stone, and Lawson open an accounting practice on January 1, 2016, in San Diego, California,...
Gray, Stone, and Lawson open an accounting practice on January 1, 2016, in San Diego, California, to be operated as a partnership. Gray and Stone will serve as the senior partners because of their years of experience. To establish the business, Gray, Stone, and Lawson contribute cash and other properties valued at $410,000, $340,000, and $170,000, respectively. An articles of partnership agreement is drawn up. It has the following stipulations: Personal drawings are allowed annually up to an amount equal...
Gray, Stone, and Lawson open an accounting practice on January 1, 2016, in San Diego, California,...
Gray, Stone, and Lawson open an accounting practice on January 1, 2016, in San Diego, California, to be operated as a partnership. Gray and Stone will serve as the senior partners because of their years of experience. To establish the business, Gray, Stone, and Lawson contribute cash and other properties valued at $340,000, $310,000, and $155,000, respectively. An articles of partnership agreement is drawn up. It has the following stipulations: Personal drawings are allowed annually up to an amount equal...
Gray, Stone, and Lawson open an accounting practice on January 1, 2016, in San Diego, California,...
Gray, Stone, and Lawson open an accounting practice on January 1, 2016, in San Diego, California, to be operated as a partnership. Gray and Stone will serve as the senior partners because of their years of experience. To establish the business, Gray, Stone, and Lawson contribute cash and other properties valued at $270,000, $240,000, and $120,000, respectively. An articles of partnership agreement is drawn up. It has the following stipulations: Personal drawings are allowed annually up to an amount equal...
Gray, Stone, and Lawson open an accounting practice on January 1, 2016, in San Diego, California,...
Gray, Stone, and Lawson open an accounting practice on January 1, 2016, in San Diego, California, to be operated as a partnership. Gray and Stone will serve as the senior partners because of their years of experience. To establish the business, Gray, Stone, and Lawsoń contribute cash and other properties valued at $210,000, $180,000, and $90,000, respectively. An articles of partnership agreement is drawn up. It has the following stipulations: Personal drawings are allowed annually up to an amount equal...
Gray, Stone, and Lawson open an accounting practice on January 1, 2016, in San Diego, California,...
Gray, Stone, and Lawson open an accounting practice on January
1, 2016, in San Diego, California, to be operated as a partnership.
Gray and Stone will serve as the senior partners because of their
years of experience. To establish the business, Gray, Stone, and
Lawson contribute cash and other properties valued at $280,000,
$250,000, and $125,000, respectively. An articles of partnership
agreement is drawn up. It has the following stipulations:
Personal drawings are allowed annually up to an amount equal...
l Gray, Stone, and Lawson open an accounting practice on January 1, 2016 in San Diego, California, to be operated as...
l
Gray, Stone, and Lawson open an accounting practice on January 1, 2016 in San Diego, California, to be operated as a partnership Gray and Stone will serve as the senior partners because of their years of experience. To establish the business, Gray, Stone, and Lawson contribute cash and other properties valued at $210,000, $180,000, and $90,000, respectively. An articles of partnership agreement is drawn up. It has the following stipulations: • Personal drawings are allowed annually up to an...
Gray, Stone, and Lawson open an accounting practice on January 1, 2016, in San Diego, California,...
Gray, Stone, and Lawson open an accounting practice on January
1, 2016, in San Diego, California, to be operated as a partnership.
Gray and Stone will serve as the senior partners because of their
years of experience. To establish the business, Gray, Stone, and
Lawson contribute cash and other properties valued at $270,000,
$240,000, and $120,000, respectively. An articles of partnership
agreement is drawn up. It has the following stipulations:
Personal drawings are allowed annually up to an amount equal...
Boswell and Johnson form a partnership on May 1, 2016. Boswell contributes cash of $68,000; Johnson...
Boswell and Johnson form a partnership on May 1, 2016. Boswell contributes cash of $68,000; Johnson conveys title to the following properties to the partnership: Book Value $ 24,000 44,000 Fair Value $ 46,000 54,000 Land Building and equipment The partners agree to start their partnership with equal capital balances. No goodwill is to be recognized. According to the articles of partnership written by the partners, profits and losses are allocated based on the following formula: • Boswell receives a...
Gray, Stone, and Lawson open an accounting practice on January
1, 2016, in San Diego, California, to be operated as a partnership.
Gray and Stone will serve as the senior partners because of their
years of experience. To establish the business, Gray, Stone, and
Lawson contribute cash and other properties valued at $420,000,
$390,000, and $195,000, respectively. An articles of partnership
agreement is drawn up. It has the following stipulations:
Personal drawings are allowed annually up to an amount equal...
Gray, Stone, and Lawson open an accounting practice on January 1, 2016, in San Diego, California, to be operated as a partnership. Gray and Stone will serve as the senior partners because of their years of experience. To establish the business, Gray, Stone, and Lawsoń contribute cash and other properties valued at $210,000, $180,000, and $90,000, respectively. An articles of partnership agreement is drawn up. It has the following stipulations: Personal drawings are allowed annually up to an amount equal...
Gray, Stone, and Lawson open an accounting practice on January
1, 2016, in San Diego, California, to be operated as a partnership.
Gray and Stone will serve as the senior partners because of their
years of experience. To establish the business, Gray, Stone, and
Lawson contribute cash and other properties valued at $280,000,
$250,000, and $125,000, respectively. An articles of partnership
agreement is drawn up. It has the following stipulations:
Personal drawings are allowed annually up to an amount equal...
l
Gray, Stone, and Lawson open an accounting practice on January 1, 2016 in San Diego, California, to be operated as a partnership Gray and Stone will serve as the senior partners because of their years of experience. To establish the business, Gray, Stone, and Lawson contribute cash and other properties valued at $210,000, $180,000, and $90,000, respectively. An articles of partnership agreement is drawn up. It has the following stipulations: • Personal drawings are allowed annually up to an...
Gray, Stone, and Lawson open an accounting practice on January
1, 2016, in San Diego, California, to be operated as a partnership.
Gray and Stone will serve as the senior partners because of their
years of experience. To establish the business, Gray, Stone, and
Lawson contribute cash and other properties valued at $270,000,
$240,000, and $120,000, respectively. An articles of partnership
agreement is drawn up. It has the following stipulations:
Personal drawings are allowed annually up to an amount equal...
Boswell and Johnson form a partnership on May 1, 2016. Boswell contributes cash of $68,000; Johnson conveys title to the following properties to the partnership: Book Value $ 24,000 44,000 Fair Value $ 46,000 54,000 Land Building and equipment The partners agree to start their partnership with equal capital balances. No goodwill is to be recognized. According to the articles of partnership written by the partners, profits and losses are allocated based on the following formula: • Boswell receives a...
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