Allocating profits and losses to the partners, preparing partnership financial statementsE...

Allocating profits and losses to the partners, preparing partnership financial statements

Edwards, French, and Gill formed the E, F and Gill partnership. Edwards invested $21,000; French, $35,000; and Gill, $44,000. Evans will manage the store; Furr will work in the store three-quarters of the time; and Gill will not work.

Requirements

1. Compute the partners’ shares of profits and losses under each of the following plans:

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2. Revenues for the year ended September 30, 2012, were $209,000, and expenses were $112,000. Under plan (b), prepare the partnership income statement for the year.