Question

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 compubed on the beginning capital balonces for the period . A compensation blowance of s9,000 was s0 g0 to Hugh with&$31,000 amount assigned to Jacobs Any remaining income would be split on 46 basis to Hugh and Jacobs respectively n 2017, revenues totaled $215000, and expenses were $170.000(not including the partners compencation allowance Hugh withdrew cosh of $11,000 dunng the year and Jacobs took out $16,000. In bddmion, the business paid $8.500 for repairs made o Hugh's home and charged it to repair expense On January 1 208, the partnership sold o 20 percent incerest to Thomes for $102.000 cash. This money was contribuned to the business with the bonus method used for accounting purposes e. Whar journal entries should the partnershp have recorded on December 31 2017 d. What journal entry should the partnership have recorded on January 1, 208 3 Answer is net cemplete Complete this จuestion by entering your-nswers in the tabs below. Required C Requined D what ieumalentres should the eartenhle have receded e^ Oecember 31, 2017,门f no entre is reeured for a Answer is not complete Complete this question by entering your answers in the tabs below Required C Required D what jeemal entries sheld the partnership hav. recorded en Dee*mber 31. 2017ア(w ne·ntry is r*wned fo, a transaction/event, select "No journalnbry required" in the irat account field.) General Jeurmal 600 0 11.000 10.000 10000 0 8.000 28 000 0 12900 0 15,100 0 Required D On Janary t 20 ·me "rtneruo 20 percent rterest to Thomes for $102000 car. This money was computed to the uiness wih te bonus mecod used for sccounting purposes e what yournal ennes thould the partnershp have recerded on December 31 2017 d. whst yournal ey should the partneeship have recorded on January 1, 20n8 Answer is not complete. Camplete this question by entering your anwers in the tabs below. recorded onaanvary 1. 201.7(ษ no erer-requred for What jourmal entry should the partners elect Nio joumal estry required in the rst account fald transactor/event 63.000

Answer 1

c.

No	Transaction	General Journal	Debit	Credit
1	1	Hugh's Drawings	8,500
		Repair Expenses		8,500
2	2	Hugh's Capital [11000+8500]	19500
		Jacob's Capital	16000
		Hugh's Drawings		19500
		Jacob's Drawings		16000
3	3	Revenues	215000
		Expenses [170,000-8500]		161500
		Income summary		53500
4	4	Income summary	53500
		Hugh's Capital		20200
		Jacob's Capital		33300

Workings:

	Hugh	Jacob
Interest on beginning capital @10%	19000	14000
Compensation allowance	9000	31000
	28000	45000
Balance [53500 -28000 - 45000] allocated in 4:6	-7800	-11700
Capitals after adjustments	20200	33300

d.

No	Transaction	General Journal	Debit	Credit
1	1	Cash	102,000
		Hugh's Capital		90000
		Jacob's capital		4800
		Thomas' Capital		7200

Beginning capital	330000
Add: Net income	53500
Less: Drawings	35500
Capital prior to admission	348000
Thomas capital	102,000
Total capital	450,000
20% of Capital	90000
Excess paid by Thomas Capital	12,000
Excess allocated to Hugh	4800
Excess allocated to Jacob	7200