Partnership A, B, & C is a law firm. You have been engaged as accountant to financial statements for the year ended Dec. 31, 2019
Homework Answers
| Year end Adjustment entries of A, B and C | |||
| S. No | Particulars | Note No | Debit/(Credit) |
| 1 | Salaries A/c Dr | 1 | $ 360,000.00 |
| To A Capital A/c Cr | $ (100,000.00) | ||
| To B Capital A/c Cr | $ (100,000.00) | ||
| To C Capital A/c Cr | $ (160,000.00) | ||
| 2 | Interest on Op Cap A/c Dr | 2 | $ 10,000.00 |
| To A Capital A/c Cr | $ (3,500.00) | ||
| To B Capital A/c Cr | $ (3,000.00) | ||
| To C Capital A/c Cr | $ (3,500.00) | ||
| 3 | A Capital A/c Dr | 3 | $ 44,000.00 |
| B Capital A/c Dr | $ 66,000.00 | ||
| C Capital A/c Dr | $ 110,000.00 | ||
| To Loss of Share | $ (220,000.00) | ||
| 4 | A Drawings A/c Dr | $ 110,000.00 | |
| B Drawings A/c Dr | $ 100,000.00 | ||
| C Drawings A/c Dr | $ 160,000.00 | ||
| To Salary -A | $ (110,000.00) | ||
| To Salary -B | $ (100,000.00) | ||
| To Salary -C | $ (160,000.00) | ||
| Adjusted Trail Balance | ||||||||
| Unadjusted Balance | # | Adjusting Entries | # | Adjusted Balance | ||||
| Account Title | Debit | Credit | Debit | Credit | Debit | Credit | ||
| Cash | $ 70,000.00 | $ 70,000.00 | ||||||
| Accounts Receivable | $ 300,000.00 | $ 300,000.00 | ||||||
| Accounts Payable | $ 70,000.00 | $ 70,000.00 | ||||||
| A, Capital | $ 190,000.00 | $ 103,500.00 | $ 293,500.00 | |||||
| A, Withdrawals | $ 110,000.00 | $ 110,000.00 | ||||||
| B, Capital | $ 180,000.00 | $ 103,000.00 | $ 283,000.00 | |||||
| B, Withdrawals | $ 100,000.00 | $ 100,000.00 | ||||||
| C, Capital | $ 150,000.00 | $ 163,500.00 | $ 313,500.00 | |||||
| C, Withdrawals | $ 160,000.00 | $ 160,000.00 | ||||||
| Income Summary | ||||||||
| Fees Revenue | $ 550,000.00 | $ 550,000.00 | ||||||
| Office Expense | $ 400,000.00 | $ 400,000.00 | ||||||
| Salaries Expense - A | $ 110,000.00 | $ 100,000.00 | $ 110,000.00 | $ 100,000.00 | ||||
| Salaries Expense - B | $ 100,000.00 | $ 100,000.00 | $ 100,000.00 | $ 100,000.00 | ||||
| Salaries Expense - C | $ 160,000.00 | $ 160,000.00 | $ 160,000.00 | $ 160,000.00 | ||||
| Interest on Opening Cap-A | $ 3,500.00 | $ 3,500.00 | ||||||
| Interest on Opening Cap-B | $ 3,000.00 | $ 3,000.00 | ||||||
| Interest on Opening Cap-C | $ 3,500.00 | $ 3,500.00 | ||||||
| $ 1,140,000.00 | $ 1,140,000.00 | $ 740,000.00 | $ 740,000.00 | $ 1,510,000.00 | $ 1,510,000.00 | |||
| A,B and C | |
| Income statement | |
| For the Year Ended December 31, 2019 | |
| Fee Revenue | 550,000.00 |
| less Office expenses | (400,000.00) |
| Gross Income | 150,000.00 |
| Statement of Allocation of Profits to A, B and C | ||||
| A | B | C | Total | |
| Opening Cap | $ 70,000.00 | $ 60,000.00 | $ 70,000.00 | |
| Fixed ratio | 2.00 | 3.00 | 5.00 | 10.00 |
| Gross Income | 150,000.00 | |||
| Salary | $ 100,000.00 | $ 100,000.00 | $ 160,000.00 | $ (360,000.00) |
| Interest on Op Cap | $ 3,500.00 | $ 3,000.00 | $ 3,500.00 | $ (10,000.00) |
| Net Loss | (220,000.00) | |||
| Share of Losses | (44,000.00) | (66,000.00) | (110,000.00) | 220,000.00 |
| - | ||||
| A, B and C | |||
| Statement of Partners Capital A/c | |||
| A | B | C | |
| Balance as on Jan 01, 2019 | $ 70,000.00 | $ 60,000.00 | $ 70,000.00 |
| Additional Capital | $ 120,000.00 | $ 120,000.00 | $ 80,000.00 |
| Less Drawings | $ (110,000.00) | $ (100,000.00) | $ (160,000.00) |
| Add: Salaries | $ 100,000.00 | $ 100,000.00 | $ 160,000.00 |
| Add: Interest on Op Cap | $ 3,500.00 | $ 3,000.00 | $ 3,500.00 |
| Less: Share of Losses | $ (44,000.00) | $ (66,000.00) | $ (110,000.00) |
| Balance as on Dec 31, 2018 | $ 139,500.00 | $ 117,000.00 | $ 43,500.00 |
| Total Capital A/c | $ 300,000.00 | ||
| A, B and C | |||
| Balance sheet as at Dec 31, 2018 | |||
| Assets | Liabilities | ||
| Cash | $ 70,000.00 | Capital A/c | $ 300,000.00 |
| Accounts Receivable | $ 300,000.00 | Accounts Payable | $ 70,000.00 |
| Total Assets | $ 370,000.00 | Total Liabilities | $ 370,000.00 |
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Partnership A, B, & C is a law firm. You have been engaged as accountant to financial statements for the year ended Dec. 31, 2019
Partnership A, B, & C is a law firm. You have been engaged as accountant to financial statements for the year ended Dec. 31, 2019
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