Question

Question (a):

Dividing Partnership Net Income.

Required:

Steve Conyers and Chelsy Poodle formed a partnership, dividing income as follows: Annual salary allowance to Poodle of $170,500. Interest of 6% on each partner's capital balance on January 1. Any remaining net income divided to Conyers and Poodle, 1:2. Conyers and Poodle had $77,600 and $75,000, respectively, in their January 1 capital balances. Net income for the year was $310,000. How much is distributed to Conyers and Poodle?

Question (b):

Liquidating Partnerships

Prior to liquidating their partnership, Perkins and Brooks had capital accounts of $46,000 and $74,000, respectively. Prior to liquidation, the partnership had no cash assets other than what was realized from the sale of assets. These partnership assets were sold for $144,000. The partnership had $5,000 of liabilities. Perkins and Brooks share income and losses equally. Determine the amount received by Brooks as a final distribution from liquidation of the partnership.

Answer 1

Answer

Calculation of distribution of net income to Conyers and Poodle
	Net Income	Conyers	Poodle
	$310,000.00
Salary allowance	-$170,500.00		$1,70,500.00
Interest on capital
- 6% of $46000	-$2760.00	$2760.00
- 6% of $74000	-$4440.00		$4440.00
Distribution of Balance net Income in 1:2 ratio	$1,32,300
- ($1,32,300/3) * 1	-$44,100	$44,100
- ($132,300./3) * 2	-$88,200		$88,200
Total Distribution	$0.00	$46860	$263140
Conyers share	$46860
Poodle share	$263140

Answer b)

sales proceeds of assets $ 144,000

Less liability    5,000

Net proceeds for partners $ 3,39,000

Less: partners capital

Perkins 46,000

Brooks 74,000 1,20,000

-----------------------------------------------------------

Net Surplus 2,19,000

Partners share in surplus

Perkins share 50% 1,09,500

Brooks Share 50% 1,09,500

Therefore Brooks received amount

74000+109500 = 183500

------------------------

If you have any query regarding the answer please as me in the comment I am here for help you. Please do not direct thumbs down just ask if you have any query. And if you like my work then please appreciates with up vote
Thank you Very much.