Part A
Income distribution 2017
Clark |
Dave |
|
Interest (5% of beginning capital balance) |
50000 (1000000*5%) |
45000 (900000*5%) |
Salary |
75000 |
75000 |
6:4 spilt of remaining $135000 income (380000-50000-45000-75000-75000) |
81000 (135000*6/10) |
54000 (135000*4/10) |
Total |
206000 |
174000 |
Date |
Account titles and explanation |
Debit |
Credit |
December 31, 2017 |
Income summary |
380000 |
|
Clark, capital |
206000 |
||
Dave, capital |
174000 |
Capital Balances as of December 31, 2017:
Clark |
Dave |
|
Initial 2017 investment |
1000000 |
900000 |
2017profit allocation |
206000 |
174000 |
2017 drawings |
(75000) |
(75000) |
Capital balances December 31, 2017 |
1131000 |
999000 |
Date |
Account titles and explanation |
Debit |
Credit |
December 31, 2017 |
Clark, capital |
75000 |
|
Dave, capital |
75000 |
||
Clark, drawings |
75000 |
||
Dave, drawings |
75000 |
Part B
Income distribution 2018
Clark |
Dave |
|
Interest (5% of beginning capital balance) |
56550 (1131000*5%) |
49950 (999000*5%) |
Salary |
75000 |
75000 |
6:4 spilt of remaining $183500 income (440000-56550-49950-75000-75000) |
110100 (183500*6/10) |
73400 (183500*4/10) |
Total |
241650 |
198350 |
Date |
Account titles and explanation |
Debit |
Credit |
December 31, 2017 |
Income summary |
440000 |
|
Clark, capital |
241650 |
||
Dave, capital |
198350 |
Capital Balances as of December 31, 2017:
Clark |
Dave |
|
Initial 2018 investment |
1131000 |
999000 |
2018 profit allocation |
241650 |
198350 |
2018 drawings |
(75000) |
(75000) |
Capital balances December 31, 2018 |
1297650 |
1122350 |
Date |
Account titles and explanation |
Debit |
Credit |
December 31, 2018 |
Clark, capital |
75000 |
|
Dave, capital |
75000 |
||
Clark, drawings |
75000 |
||
Dave, drawings |
75000 |
Part C
A partnership would have a net income allocation formula that used a salary and interest allowance in the calculation of each partner’s share of earnings because it helps in determining the amount each partner will withdraw in cash from the business during that particular year, in anticipation of their net income share.
Please show all the work. Thank you for your help! Clark and Dave are partners in...
Accounting 202 Quiz # 2 sses in the Clark and Dave are partners in the Company. following manner They share income and lo (1) Each partner is to receive a salary of $75,000; (2) Each partner is to receive 5% interest on beginning capital balances; and (3) Any remainder profit/loss is to be split in a ratio of 6:4 (Clark/Dave). The partners withdraw an amount equal to their salary each year. On January 1, 2017, Clark's capital balance was $1,000,000...
Clark and Dave are partners in the Company. following manner: They share income and losses in the (1) Each partner is to receive a salary of $75,000; (2) Each partner is to receive 5% interest on beginning capital balances; and (3) Any remainder profit/loss is to be split in a ratio of 6:4 (Clark/Dave). The partners withdraw an amount equal to their salary each year. On January 1, 2017, Clark's capital balance was $1,000,000 and Dave's was $900,000. Assuming each...
The partnership agreement of Walt, Henry and Victoria provides that profits and losses are to be divided among the partners as follows: Walt is to receive a salary allocation of $10,000 for managing the partnership business. Partners are to receive 10% interest on their average partner capital balances during the year. Note: Drawings are excluded from the computation of average partner capital. Remaining profits/losses are to be divided as follows: Walt, 30%; Henry, 30%; and Victoria, 40%. Walt had a...
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...
Allocation of Income for Partners. Determine each partner's share and make the appropriate general journal entry to close the Income Summary account to the capital accounts. Khalid, Dina, and James are partners with beginning-year capital balances of $400,000, $320,000, and $160,000, respectively. The partners agreed to share income and loss as follows: Salary of $30,000 to Khalid, $50,000 to Dina, and $55,000 to James. An interest allowance of 10% on beginning-of-the year capital balances. Any remaining balance is to be...
Batman, Spiderman and Mr. Freeze are partners in the accounting firm of BSF-CPA They share profits and losses as follows: Spiderman Batman Mr. Freeze Partners receive 12% interest on their beginning of the year capital balance Mr. Freeze receives a $30,000 salary while Batman and Spiderman each receive $40,000 salaries All 3 take their salary in cash. In addition, Mr. Freeze takes $1000 out of the partnership each month to pay for his tanning-salon membership. At the beginning of 2017...
PROBLEM 18 (18 pts.) Partners Conner, Tuitt, and Heyward share profits and losses in a 3:4:5 ratio, respectively. Their average capital balances for the quarter year were $50,000, $70,000, and $80,000, respectively. Conner and Heyward each receive a “salary” of $8,000 each quarter due to their years of experience in the field. All three partners receive 5% interest on their average capital balance. The net income for this quarter was $25,100. Prepare a schedule that shows the distribution of the...
Thank you!! ??
Problem 11-5A Partnership entries, profit allocation, admission of a partner L02,3,4 CHECK FIGURES: c. Cr Bow: $245,200; Cr Amri: $134,800; d. Dr Amri: $48,000 On June 1, 2017, Jill Bow and Aisha Amri formed a partnership, to open a commercial gluten-free bak- ery, contributing $280,000 cash and s360,000 of equipment, respectively. Also, the partnership as sumed responsibility for a $40,000 note payable associated with the equipment. The partners agreed to share profits as follows: Bow is to...
With the following information (below), I need help
preparing year-end adjusting entries (step 1), completing the
partnership profit/losses allocation chart + subsequent adjusting
journal entry (step 2), posting adjusting entries and completing
the trial balance sheet (step 3), and preparing an income
statement, statement of partners' capital and balance sheet (step
4).
Partnership A, B, and C is a law firm. You have been engaged as
accountant to prepare financial statements for the year ended
December 31, 2019.
On the...
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...