Question
In: Accounting
Ben Conway, Ida Chan, and Clair Scott formed CCS Consulting by making capital contributions of $252,000,...
Ben Conway, Ida Chan, and Clair Scott formed CCS Consulting by
making capital contributions of $252,000, $288,000, and $182,000,
respectively. They anticipate annual profit of $433,200 and are
considering the following alternative plans of sharing profits and
losses:
a. Equally;
b. In the ratio of their initial investments; or
c. Salary allowances of $112,000 to Conway, $89,000 to Chan, and
$64,000 to Scott and interest allowances of 10% on initial
investments, with any remaining balance shared equally.
Required :
1. Use the schedule to show how a profit of $433,200 would
be distributed under each of the alternative plans being
considered. (Enter all amounts as positive
values.)
2. Prepare a statement of changes in equity
showing the allocation of profit to the partners, assuming they
agree to use alternative (c) and the profit actually earned for the
year ended December 31, 2017, is $433,200. During the year, Conway,
Chan, and Scott withdraw $44,000, $34,000, and $24,000,
respectively. (Enter all amounts as positive
values.)
3. Prepare the December 31, 2017, journal entry
to close Income Summary assuming they agree to use alternative (c)
and the profit is $433,200. Also, close the withdrawals
accounts.
Solutions
ekkarill92 answered 4 months agoRelated Solutions
Ben Conway, Ida Chan, and Clair Scott formed CCS Consulting this year by making capital contributions...
Ben Conway, Ida Chan, and Clair Scott formed CCS Consulting this
year by making capital contributions of $248,000, $284,000, and
$178,000, respectively. They anticipate annual profit of $426,000
and are considering the following alternative plans of sharing
profits and losses:
Equally;
In the ratio of their initial investments; or
Salary allowances of $110,000 to Conway, $87,000 to Chan, and
$62,000 to Scott and interest allowances of 10% on initial
investments, with any remaining balance shared equally.
Required :
1. Use...
Ben Conway, Ida Chan, and Clair Scott formed CCS Consulting by making capital contributions of $258,000,...
Ben Conway, Ida Chan, and Clair Scott formed CCS Consulting by
making capital contributions of $258,000, $294,000, and $188,000,
respectively. They anticipate annual profit of $444,000 and are
considering the following alternative plans of sharing profits and
losses:
a. Equally;
b. In the ratio of their initial investments; or
c. Salary allowances of $115,000 to Conway, $92,000 to Chan, and
$67,000 to Scott and interest allowances of 10% on initial
investments, with any remaining balance shared equally.
Required :
1....
Ben Conway, Ida Chan, and Clair Scott formed CCS Consulting by making capital contributions of $258,000,...
Ben Conway, Ida Chan, and Clair Scott formed CCS Consulting by
making capital contributions of $258,000, $294,000, and $188,000,
respectively. They anticipate annual profit of $444,000 and are
considering the following alternative plans of sharing profits and
losses:
a. Equally;
b. In the ratio of their initial investments; or
c. Salary allowances of $115,000 to Conway, $92,000 to Chan, and
$67,000 to Scott and interest allowances of 10% on initial
investments, with any remaining balance shared equally.
Required :
1....
Sharon and Nancy formed a partnership by making capital contributions of $130,000 and $195,000 respectively. The...
Sharon and Nancy formed a partnership by making capital
contributions of $130,000 and $195,000 respectively. The annual
partnership income of $230,000 is to be allocated assuming a salary
allowance of $40,000 to Sharon and $35,000 to Nancy; interest
allowances of 12% on their initial capital investments; and the
balance shared equally.
Prepare the entries to record the initial capital investments, the
allocation of net income, and close the partner's withdrawal
accounts assuming that Sharon withdrew $50,000 and Nancy withdrew
$45,000.
Mo Meek, Lu Ling, and Barb Beck formed the MLB Partnership by making capital contributions of...
Mo Meek, Lu Ling, and Barb Beck formed the MLB Partnership by
making capital contributions of $67,500, $262,500, and $420,000,
respectively. They predict annual partnership net income of
$450,000 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 $80,000 to
Mo, $60,000 to Lu, and $90,000 to Barb; interest allowances of 10%
on their initial capital investments; and the balance shared...
Bill Beck, Bruce Beck, and Barb Beck formed the BBB Partnership by making capital contributions of...
Bill Beck, Bruce Beck, and Barb Beck formed the BBB Partnership
by making capital contributions of $79,200, $308,000, and $492,800,
respectively. They predict annual partnership net income of
$519,000 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 $85,200 to
Bill, $63,900 to Bruce, and $96,500 to Barb; interest allowances of
10% on their initial capital investments; and the balance shared...
Mo Meek, Lu Ling, and Barb Beck formed the MLB Partnership by making capital contributions of...
Mo Meek, Lu Ling, and Barb Beck formed the MLB Partnership by
making capital contributions of $72,900, $283,500, and $453,600,
respectively. They predict annual partnership net income of
$481,500 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 $82,400 to
Mo, $61,800 to Lu, and $93,000 to Barb; interest allowances of 10%
on their initial capital investments; and the balance shared...
Mo Meek, Lu Ling, and Barb Beck formed the MLB Partnership by making capital contributions of...
Mo Meek, Lu Ling, and Barb Beck formed the MLB Partnership by
making capital contributions of $67,500, $262,500, and $420,000,
respectively. They predict annual partnership net income of
$450,000 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 $80,000 to
Mo, $60,000 to Lu, and $90,000 to Barb; interest allowances of 10%
on their initial capital investments; and the balance shared...
Farmer and Taylor formed a partnership with capital contributions of $205,000 and $255,000, respectively. Their partnership...
Farmer and Taylor formed a partnership with capital
contributions of $205,000 and $255,000, respectively. Their
partnership agreement calls for Farmer to receive a $72,000 per
year salary. The remaining income or loss is to be divided equally.
Assuming net loss for the current year is $16,000, the journal
entry to allocate the net loss is:
Debit Taylor, Capital, $44,000; Credit Income Summary, $16,000;
Credit Farmer, Capital, $28,000.
Debit Income Summary, $16,000; Debit Farmer, Capital, $28,000;
Credit Taylor, Capital, $44,000.
Debit...
1. Farmer and Taylor formed a partnership with capital contributions of $280,000 and $330,000, respectively. Their...
1. Farmer and Taylor formed a partnership with capital
contributions of $280,000 and $330,000, respectively. Their
partnership agreement calls for Farmer to receive a $86,000 per
year salary. The remaining income or loss is to be divided equally.
Assuming net income for the current year is $231,000, the journal
entry to allocate net income is:
2. Christie and Jergens formed a partnership with capital
contributions of $210,000 and $310,000, respectively. Their
partnership agreement calls for Christie to receive a $51,000...
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