Problem 14-26 (LO 14-2, 14-4, 14-6, 14-9) In the early part of 2018, the partners of...
Problem 14-26 (LO 14-2, 14-4, 14-6, 14-9)
In the early part of 2018, the partners of Hugh, Jacobs, and Thomas sought assistance from a local accountant. They had begun a new business in 2017 but had never used an accountant’s services.
Hugh and Jacobs began the partnership by contributing $170,000 and $120,000 in cash, respectively. Hugh was to work occasionally at the business, and Jacobs was to be employed full-time. They decided that year-end profits and losses should be assigned as follows:
- Each partner was to be allocated 10 percent interest computed on the beginning capital balances for the period.
- A compensation allowance of $5,000 was to go to Hugh with a $27,000 amount assigned to Jacobs.
- Any remaining income would be split on a 4:6 basis to Hugh and Jacobs, respectively.
In 2017, revenues totaled $195,000, and expenses were $158,000 (not including the partners’ compensation allowance). Hugh withdrew cash of $10,000 during the year, and Jacobs took out $15,000. In addition, the business paid $6,500 for repairs made to Hugh’s home and charged it to repair expense.
On January 1, 2018, the partnership sold a 15 percent interest to Thomas for $58,000 cash. This money was contributed to the business with the bonus method used for accounting purposes.
1. What journal entries should the partnership have recorded on December 31, 2017?
A. Record entry to reclassify payment made to repair personal residence.
B. Record entry to close drawings accounts for 2017.
C. Record entry to close revenue and expense accounts for 2017.
D. Record the distribution of net income to partners.
2. What journal entry should the partnership have recorded on January 1, 2018?
A. Record the payment made by Thomas using the bonus method.
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Problem 14-26 (LO 14-2, 14-4, 14-6, 14-9)
In the early part of 2018, the partners of...
In the early part of 2018, the partners of Hugh, Jacobs, and Thomas sought assistance from...
In the early part of 2018, the partners of Hugh, Jacobs, and Thomas sought assistance from a local accountant. They had begun a new business in 2017 but had never used an accountant’s services. Hugh and Jacobs began the partnership by contributing $115,000 and $65,000 in cash, respectively. Hugh was to work occasionally at the business, and Jacobs was to be employed full-time. They decided that year-end profits and losses should be assigned as follows: Each partner was to be...
In the early part of 2018, the partners of Hugh, Jacobs, and Thomas sought assistance from...
In the early part of 2018, the partners of Hugh, Jacobs, and Thomas sought assistance from a local accountant. They had begun a new business in 2017 but had never used an accountant’s services. Hugh and Jacobs began the partnership by contributing $165,000 and $115,000 in cash, respectively. Hugh was to work occasionally at the business, and Jacobs was to be employed full-time. They decided that year-end profits and losses should be assigned as follows: Each partner was to be...
in the early part of 2018, the partners of Hugh, Jacobs, and Thomas sought assistance from...
in the early part of 2018, the partners of Hugh, Jacobs, and Thomas sought assistance from a local accountant. They had begun a new business in 2017 but had never used an accountant's services Hugh and Jacobs began the partnership by contributing $100,000 and $50,000 in cash, respectively. Hugh was to work occasionally at the business, and Jacobs was to be employed full-time. They decided that year-end profits and losses should be assigned as follows: • Each partner was to...
In the early part of 2015, the partners of Hugh, Jacobs, and Thomas sought assistance from...
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In the early part of 2015, the partners of Hugh, Jacobs, and Thomas sought assistance from...
In the early part of 2015, the partners of Hugh, Jacobs, and Thomas sought assistance from a local accountant. They had begun a new business in 2014 but had never used an accountant's services. Hugh and Jacobs began the partnership by contributing $70,000 and $20,000 in cash, respectively. Hugh was to work occasionally at the business, and Jacobs was to be employed full time. They decided that year-end profits and losses should be assigned as follows: Each partner was to...
In the eary partof 2018, the partners of Hugn, Jacobs, and Thomas sougt assistance from。10cal ac...
in the eary partof 2018, the partners of Hugn, Jacobs, and Thomas sougt assistance from。10cal accountant They had begun business in 2017 But hed never used an bccountant's services. new Hugh and Jacobs began the partnership by contributing $190,000 and $140,000 in cash, respectively Hugh was to work occasionaily at the business, and Jocobs wes to be employed fui-time. They decided that year-end profts and losses should be assigned as follows Each partner was to be allocated 10 percent inberest...
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Early in 2018, the partners of Fitz, Leu and Wen sought your assistance to help with their partnership accounting. They began the new business in 2017 but did not hire a professional accountant to help them. Fitz and Leu began the partnership contributing $170,000 and $120,000 in cash, respectively. Fitz was to work occasionally at the business, and Leu was to be employed full-time. They decided that year-end profits and losses should be assigned as follows: 1. Each partner was...
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...
Boswell and Johnson form a partnership on May 1, 2016. Boswell contributes cash of $67,000, Johnson...
Boswell and Johnson form a partnership on May 1, 2016. Boswell contributes cash of $67,000, Johnson conveys title to the following properties to the partnership: Book Value $ 23,500 43,500 Fair Value $ 45,000 53,000 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...
Boswell and Johnson form a partnership on May 1, 2016. Boswell contributes cash of $62,000; Johnson...
Boswell and Johnson form a partnership on May 1, 2016. Boswell contributes cash of $62,000; Johnson conveys title to the following properties to the partnership: Book Value Fair Value Land $ 21,000 $ 40,000 Building and equipment 41,000 48,000 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 compensation...
in the early part of 2018, the partners of Hugh, Jacobs, and Thomas sought assistance from a local accountant. They had begun a new business in 2017 but had never used an accountant's services Hugh and Jacobs began the partnership by contributing $100,000 and $50,000 in cash, respectively. Hugh was to work occasionally at the business, and Jacobs was to be employed full-time. They decided that year-end profits and losses should be assigned as follows: • Each partner was to...
In the early part of 2015, the partners of Hugh, Jacobs, and Thomas sought assistance from a local accountant. They had begun a new business in 2014 but had never used an accountant's services. Hugh and Jacobs began the partnership by contributing $70,000 and $20,000 in cash, respectively. Hugh was to work occasionally at the business, and Jacobs was to be employed full time. They decided that year-end profits and losses should be assigned as follows: Each partner was to...
in the eary partof 2018, the partners of Hugn, Jacobs, and Thomas sougt assistance from。10cal accountant They had begun business in 2017 But hed never used an bccountant's services. new Hugh and Jacobs began the partnership by contributing $190,000 and $140,000 in cash, respectively Hugh was to work occasionaily at the business, and Jocobs wes to be employed fui-time. They decided that year-end profts and losses should be assigned as follows Each partner was to be allocated 10 percent inberest...
Early in 2018, the partners of Fitz, Leu and Wen sought your assistance to help with their partnership accounting. They began the new business in 2017 but did not hire a professional accountant to help them. Fitz and Leu began the partnership contributing $170,000 and $120,000 in cash, respectively. Fitz was to work occasionally at the business, and Leu was to be employed full-time. They decided that year-end profits and losses should be assigned as follows: 1. Each partner was...
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...
Boswell and Johnson form a partnership on May 1, 2016. Boswell contributes cash of $67,000, Johnson conveys title to the following properties to the partnership: Book Value $ 23,500 43,500 Fair Value $ 45,000 53,000 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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