Question
In: Accounting
The Trump, Clinton, Mueller Partnership has been around for several years The partners share profits equally...
| The Trump, Clinton, Mueller Partnership has been around for several years | |||||||||
| The partners share profits equally but Trump and Clinton take 40% of losses while Mueller only take 20% of losses. | |||||||||
| Mueller receives $30,000 in salary and all partners get 10% return on their beginning of the year capital accounts. | |||||||||
| Each year Trump makes a withdrawl of $6000 for hair care products and Clinton makes a withdrawl of $15,000 for new pant suits. | |||||||||
| At the beginning of 2017 Trump, Clinton and Mueller had the following capital accounts | |||||||||
| Trump | 500,000 | ||||||||
| Clinton | 300,000 | ||||||||
| Mueller | 200,000 | ||||||||
| Income before Mueller salary and partners interest is as follows: | |||||||||
| 2017 | 400,000 | ||||||||
| 2018 | 50,000 | ||||||||
| 2019 | 300,000 | ||||||||
| Required: determine each partner's capital account on December 31 | |||||||||
| 2017 | |||||||||
| 2018 | |||||||||
| 2019 | |||||||||
Solutions
Expert Solution
a) Partner's Capital Account for 2017
Profit for the year = $400,000
(Amounts in $)
| Trump | Clinton | Mueller | Total | |
| Beginning Balance | 500,000 | 300,000 | 200,000 | 1,000,000 |
| Salary Allowances | 30,000 | 30,000 | ||
| Interest (10% of Beginning Capital account balance) | 50,000 | 30,000 | 20,000 | 100,000 |
| 550,000 | 330,000 | 250,000 | 1,130,000 | |
| Remainder Profit (Equally) (400,000-130,000) | 90,000 | 90,000 | 90,000 | 270,000 |
| 640,000 | 420,000 | 340,000 | 1,400,000 | |
| Less: Withdrawals | (6,000) | (15,000) | ||
| Ending Balance | 634,000 | 405,000 | 340,000 | 1,379,000 |
b) Partner's Capital Account for 2018
Profit for the year = $50,000
(Amounts in $)
| Trump | Clinton | Mueller | Total | |
| Beginning Balance | 634,000 | 405,000 | 340,000 | 1,379,000 |
| Salary Allowances | 30,000 | 30,000 | ||
| Interest (10% of Beginning Capital account balance) | 63,400 | 40,500 | 34,000 | 137,900 |
| 697,400 | 445,500 | 404,000 | 1,546,900 | |
| Remainder Loss (50,000-167,900) (40% 40% 20%) | (47,160) | (47,160) | (23,580) | (117,900) |
| 650,240 | 398,340 | 380,420 | 1,429,000 | |
| Less: Withdrawals | (6,000) | (15,000) | (21,000) | |
| Ending Balance | 644,240 | 383,340 | 380,420 | 1,408,000 |
c) Partner's Capital Account for 2019
Profit for the year = $300,000
(Amounts in $)
| Trump | Clinton | Mueller | Total | |
| Beginning Balance | 644,240 | 383,340 | 380,420 | 1,408,000 |
| Salary Allowances | 30,000 | 30,000 | ||
| Interest (10% of Beginning Capital account balance) | 64,424 | 38,334 | 38,042 | 140,800 |
| 708,664 | 421,674 | 448,462 | 1,578,800 | |
| Remainder Profit (Equally) (300,000-170,800) | 43066 | 43067 | 43067 | 129,200 |
| 751,730 | 464,741 | 491,529 | 1,708,000 | |
| Less: Withdrawals | (6,000) | (15,000) | (21,000) | |
| Ending Balance | 745,730 | 449,741 | 491,529 | 1,687,000 |
ekkarill92 answered 3 months agoRelated Solutions
Trump, Clinton, and Mueller are forming a partnership. &n
Trump, Clinton, and Mueller are forming a partnership.
Trump and Clinton are each contributing $100,000 while Mueller
is contributing $70,000 and his
expertise.
They will be equal partners and each will show the same
beginning capital account.
REQUIRED: A) MAKE THE JOURNAL ENTRY USING THE
BONUS METHOD
B) MAKE THE JOURNAL ENTRY
USING THE GOODWILL METHOD
Alex and Bess have been in partnership for many years. The partners, who share profits and...
Alex and Bess have been in partnership for many years. The
partners, who share profits and losses on a 60:40 basis,
respectively, wish to retire and have agreed to liquidate the
business. Liquidation expenses are estimated to be $5,000. At the
date the partnership ceases operations, the balance sheet is as
follows:
Cash
$
50,000
Liabilities
$
40,000
Noncash assets
150,000
Alex, capital
90,000
Bess, capital
70,000
Total assets
$
200,000
Total liabilities and capital
$
200,000
Part A: Prepare...
Alex and Bess have been in partnership for many years. The partners, who share profits and...
Alex and Bess have been in partnership for many years. The
partners, who share profits and losses on a 60:40 basis,
respectively, wish to retire and have agreed to liquidate the
business. Liquidation expenses are estimated to be $9,500. At the
date the partnership ceases operations, the balance sheet is as
follows:
Cash
$
59,000
Liabilities
$
44,500
Noncash assets
180,000
Alex, capital
108,000
Bess, capital
86,500
Total assets
$
239,000
Total liabilities and capital
$
239,000
Part A: Prepare...
Alex and Bess have been in partnership for many years. The partners, who share profits and...
Alex and Bess have been in partnership for many years. The
partners, who share profits and losses on a 60:40 basis,
respectively, wish to retire and have agreed to liquidate the
business. Liquidation expenses are estimated to be $9,500. At the
date the partnership ceases operations, the balance sheet is as
follows:
Cash
$
71,000
Liabilities
$
61,000
Noncash assets
300,000
Alex, capital
180,000
Bess, capital
130,000
Total assets
$
371,000
Total liabilities and
capital
$
371,000
Part A: Prepare...
Alex and Bess have been in partnership for many years. The partners, who share profits and...
Alex and Bess have been in partnership for many years. The
partners, who share profits and losses on a 60:40 basis,
respectively, wish to retire and have agreed to liquidate the
business. Liquidation expenses are estimated to be $6,500. At the
date the partnership ceases operations, the balance sheet is as
follows:
Cash
$
53,000
Liabilities
$
41,500
Noncash assets
120,000
Alex, capital
72,000
Bess, capital
59,500
Total assets
$
173,000
Total liabilities and capital
$
173,000
Part A: Prepare...
Alex and Bess have been in partnership for many years. The partners, who share profits and...
Alex and Bess have been in partnership for many years. The
partners, who share profits and losses on a 60:40 basis,
respectively, wish to retire and have agreed to liquidate the
business. Liquidation expenses are estimated to be $6,500. At the
date the partnership ceases operations, the balance sheet is as
follows:
Cash
$
53,000
Liabilities
$
41,500
Noncash assets
120,000
Alex, capital
72,000
Bess, capital
59,500
Total assets
$
173,000
Total liabilities and capital
$
173,000
Part A: Prepare...
Alex and Bess have been in partnership for many years. The partners, who share profits and...
Alex and Bess have been in partnership for many years. The
partners, who share profits and losses on a 70:30 basis,
respectively, wish to retire and have agreed to liquidate the
business. Liquidation expenses are estimated to be $4,500. At the
date the partnership ceases operations, the balance sheet is as
follows:
Cash
$
46,000
Liabilities
$
35,000
Noncash assets
115,000
Alex, capital
80,500
Bess, capital
45,500
Total assets
$
161,000
Total liabilities and capital
$
161,000
Part A: Prepare...
Fred and George have been in partnership for many years. The partners, who share profits and...
Fred and George have been in partnership for many years. The
partners, who share profits and losses on a 60:40 basis,
respectively, wish to retire and have agreed to liquidate the
business. Liquidation expenses are estimated to be $10,000. At the
date the partnership ceases operations, the balance sheet is as
follows:
Cash
$
100,000
Liabilities
$
80,000
Noncash assets
200,000
Fred, capital
100,000
George, capital
120,000
Total assets
$
300,000
...
Alex and Bess have been in partnership for many years. The partners, who share profits and...
Alex and Bess have been in partnership for many years. The
partners, who share profits and losses on a 60:40 basis,
respectively, wish to retire and have agreed to liquidate the
business. Liquidation expenses are estimated to be $8,500. At the
date the partnership ceases operations, the balance sheet is as
follows: Cash $ 57,000 Liabilities $ 43,500 Noncash assets 160,000
Alex, capital 96,000 Bess, capital 77,500 Total assets $ 217,000
Total liabilities and capital $ 217,000 Part A: Prepare...
Alex and Bess have been in partnership for many years. The partners, who share profits and...
Alex and Bess have been in partnership for many years. The
partners, who share profits and losses on a 70:30 basis,
respectively, wish to retire and have agreed to liquidate the
business. Liquidation expenses are estimated to be $8,000. At the
date the partnership ceases operations, the balance sheet is as
follows:
Cash
$
56,000
Liabilities
$
43,000
Noncash assets
150,000
Alex, capital
105,000
Bess, capital
58,000
Total assets
$
206,000
Total liabilities and capital
$
206,000
Part A: Prepare...
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