Part (a) (156,000 : 364,000) = (3:7)
Year | Calculations | Share to Philip | Share to Case | Total |
1 | Loss of 112,000 in (3:7) | (33,600) | (78,400) | (112,000) |
2 | Profit of 162,000 in 3:7) | 48,600 | 113,400 | 162,000 |
3 | Profit of 262,000 in (3:7) | 78,600 | 183,400 | 262,000 |
Part (b) (one-third : full-time) = (1:3)
Year | Calculations | Share to Philip | Share to Case | Total |
1 | Loss of 112,000 in (1:3) | (28,000) | (84,000) | (112,000) |
2 | Profit of 162,000 in (1:3) | 40,500 | 121,500 | 162,000 |
3 | Profit of 262,000 in (1:3) | 65,500 | 196,500 | 262,000 |
Part (c) 156,000 : 364,000 = 3:7
Year | Calculations | Share to Philip | Share to Case | Total |
1 | Loss | (112,000) | ||
Salary Allowance | 84,000 | 84,000 | (168,000) | |
Balance | (280,000) | |||
Remainder (3:7) | (84,000) | (196,000) | 280,000 | |
Balance | 0 | |||
Share to Each Partner | 0 | (112,000) | (112,000) | |
2 | Profit | 162,000 | ||
Salary Allowance | 84,000 | 84,000 | (168,000) | |
Balance | (6,000) | |||
Remainder (3:7) | (1,800) | (4,200) | 6,000 | |
Balance | 0 | |||
Share to Each Partner | 82,200 | 79,800 | 162,000 | |
3 | Profit | 262,000 | ||
Salary Allowance | 84,000 | 84,000 | (168,000) | |
Balance | 94,000 | |||
Remainder (3:7) | 28,200 | 65,800 | (94,000) | |
Balance | 0 | |||
Share to Each Partner | 112,200 | 149,800 | 262,000 | |
Part (d) (1:1)
Year | Calculations | Share to Philip | Share to Case | Total |
1 | Loss | (112,000) | ||
Salary Allowance | 84,000 | 84,000 | (168,000) | |
Interest Allowance | 15,600 | 36,400 | (52,000) | |
Total Salaries and Interest | (220,000) | |||
Balance | 332,000 | |||
Remainder (1:1) | (166,000) | (166,000) | 332,000 | |
Balance | 0 | |||
Share to Each Partner | (66,400) | (45,600) | (112,000) | |
2 | Profit | 162,000 | ||
Salary Allowance | 84,000 | 84,000 | (168,000) | |
Interest Allowance | 15,600 | 36,400 | (52,000) | |
Total Salaries and Interest | (220,000) | |||
Balance | (58,000) | |||
Remainder (1:1) | (29,000) | (29,000) | 6,000 | |
Balance | 0 | |||
Share to Each Partner | 70,600 | 91,400 | 162,000 | |
3 | Profit | 262,000 | ||
Salary Allowance | 84,000 | 84,000 | (168,000) | |
Interest Allowance | 15,600 | 36,400 | (52,000) | |
Total Salaries and Interest | (220,000) | |||
Balance | 42,000 | |||
Remainder (1:1) | 21,000 | 21,000 | (94,000) | |
Balance | 0 | |||
Share to Each Partner | 120,600 | 141,400 | 262,000 |
Phillip and Case are in the process of forming a partnership to Import Belgian chocolates, to...
please full calculation and explanation. CHECK FIGURES: d. Year 1: Phillip: $(86,000); Case: $(14,000); d. Year 2: Phillip: $39,000; Case: $111,000; d. Year 3: Phillip: $89,000; Case: $161,000 ntribute one third time and Case full time. They have discussed the followingal which . In the ratio of their initial investments, which they have agreed will be Sie a partnership to import Belgian chocolate full titme They have discussed the followin CHAPTER 11 Partnerships offasefulltime. Th Phillip and Case are in...
Watts and Lyon are forming a partnership. Watts invests $36,000 and Lyon invests $54,000. The partners agree that Watts will work one-fourth of the total time devoted to the partnership and Lyon will work three-fourths. They have discussed the following alternative plans for sharing income and loss: (a) in the ratio of their initial capital investments; (b) in proportion to the time devoted to the business; (c) a salary allowance of $15,000 per year to Lyon and the remaining balance...
Irene Watts and John Lyon are forming a partnership to which Watts will devote one-fourth time and Lyon will devote full time. They have discussed the following alternative plans for sharing income and loss: (a) in the ratio of their initial capital investments, which they have agreed will be $35,000 for Watts and $65,000 for Lyon; (b) in proportion to the time devoted to the business; (c) a salary allowance of $1,250 per month to Lyon and the balance in...
Exercise 11-4 Profit allocation in a partnership LO3 Dallas and Weiss formed a partnership to manage rental properties, by investing $132,000 and $198,000, respectively. During its first year, the partnership recorded profit of $451,000. Required: Prepare calculations showing how the profit should be allocated to the partners under each of the following plans for sharing profit and losses: a. The partners falled to agree on a method of sharing profit. Share to Dallas Share to Weiss Total b. The partners...
Irene Watts and John Lyon are forming a partnership to which Watts will devote one-half time and Lyon will devote full time. They have discussed the following alternative plans for sharing income and loss: (a) in the ratio of their initial capital investments, which they have agreed will be $28,000 for Watts and $42,000 for Lyon; (b) in proportion to the time devoted to the business; (c) a salary allowance of $1,250 per month to Lyon and the balance in...
kindly put the answers in a table for easy understanding Watts and Lyon are forming a partnership. Watts invests $36,000 and Lyon invests $54,000. The partners agree that Watts will work one-fourth of the total time devoted to the partnership and Lyon will work three-fourths. They have discussed the following alternative plans for sharing income and loss: (a) in the ratio of their initial capital investments; (b) in proportion to the time devoted to the business; (c) a salary allowance...
Exercise 12-6 Income allocation in a partnership LO P2 Ramer and Knox began a partnership by investing $60,000 and $90,000, respectively. The partners agreed to share net income and loss by giving annual salary allowances of $50,000 to Ramer and $40,000 to Knox, 10% interest allowances on their investments, and any remaining balance shared equally. (Enter all allowances as positive values. Enter losses as negative values.) Required: 1. Determine each partner's share given a first-year net income of $98,800. 2....
Problem D-2A Allocating partnership income and loss; sequential years LO P2 rene Watts and John Lyon are forming a partnership to which Watts will devote one-half time and Lyon will devote full time. They have discussed the following alternative plans for sharing income and loss: (a) in the ratio of their initial capital investments, which they have agreed will be $28,000 for Watts and $52,000 for Lyon; (b) in proportion to the time devoted to the business; (c)a salary allowance...
Problem 12-4A Partnership income allocation, statement of partners' equity, and closing entries LO P2 [The following information applies to the questions displayed below.] Mo, Lu, and Barb formed the MLB Partnership by making investments of $84,600, $329,000, and $526,400, respectively. They predict annual partnership net income of $550,500 and are considering the following alternative plans of sharing income and loss: (a) equally; (b) in the ratio of their initial capital investments; or (c) salary allowances of $87,600 to Mo, $65,700...
Jim and Pam formed a partnership to open a paper company by investing $70,000 and $50,000, respectively. They agreed to share profit and losses by allowing a $5,000 annual salary allowance to Jim and a $1,500 annual salary allowance to Pam. As well, each partner is to receive an interest allowance equal to a 10% return on initial capital investments, and the balance is to be divided 70% to Jim and 30% to Pam. At the end of the first...