a. | ||||
2011 | ||||
Jun-01 | Cash | 280,000 | ||
Equipment | 360,000 | |||
Jill Bow, capital | 280,000 | |||
Aisha Amri, capital | 320,000 | |||
Note payable | 40,000 | |||
To record formation of partnership. | ||||
b. | ||||
2011 | ||||
Nov. 20 | Amri, withdrawals | 100,000 | ||
Cash | 100,000 | |||
To record withdrawal by partner. | ||||
c. | ||||
2012 | ||||
May-31 | Income summary | 380,000 | ||
Jill Bow, capital | 245,200 | |||
Aisha Amri, capital | 134,800 | |||
To record closing of net income to capital. | ||||
Supporting calculations: | ||||
Bow | Amri | Total | ||
Net income | $380,000 | |||
Salary allowance: | ||||
Bow | $150,000 | |||
Interest allowances: | ||||
Bow (8% on $280,000) | 22,400 | |||
Amri (8% on $320,000) | $25,600 | |||
Total salary and interest allowances | $172,400 | $25,600 | -198,000 | |
Balance of income to be allocated | 182,000 | |||
Balance allocated 40/60: | ||||
Bow (40% × $182,000) | 72,800 | |||
Amri (60% × $182,000) | 109,200 | |||
Total allocated equally | -182,000 | |||
Balance of income | _ _____ | ___ ___ | 0 | |
Shares of the partners | $245,200 | $134,800 | $380,000 | |
d. | ||||
2012 | ||||
Jun-01 | Cash | 120,000 | ||
Bow, capital | 32,000 | |||
Amri, capital | 48,000 | |||
Wilems, capital | 200,000 | |||
To record admission of Wilems for a 20% interest. | ||||
so we have | ||||
bow capital | $ 525,200 | |||
(280000+245200) | ||||
amri capital | $ 354,800 | |||
(320000-100000+134800) | ||||
total equity | $ 880,000 | |||
cash brought by him | $ 120,000 | |||
total equity after admission | $ 1,000,000 | |||
new partners share(20%) | $ 200,000 | |||
cash brought by him | $ (120,000) | |||
bonus paid to him | $ 80,000 | |||
contrinuted by | ||||
bow(80000*40%) | $ 32,000 | |||
amri(80000*60%) | $ 48,000 |
I sent this in before and it was answered incorrectly, the answers are at the top...
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