Question

1. Prior to liquidating their partnership, Craig and Jenny had capital accounts of $74,060 and $125,920, respectively. The partnership assets were sold for $242,930. The partnership had $27,060 of liabilities. Craig and Jenny share income and losses equally.

Determine the amount received by Jenny as a final distribution from liquidation of the partnership.

2. Emerson and Dakota formed a partnership dividing income as follows:

1. Annual salary allowance to Emerson of $39,600
2. Interest of 10% on each partner's capital balance on January 1
3. Any remaining net income divided equally.

Emerson and Dakota had $20,000 and $126,400, respectively, in their January 1 capital balances. Net income for the year was $222,400.

How much net income should be distributed to Dakota?

3. Malcolm has a capital balance of $63,200 after adjusting to fair market value. Celeste contributes $39,200 to receive a 25% interest in a new partnership with Malcolm.

Determine the amount and recipient of the partner bonus

4.A company had stock outstanding as follows during each of its first three years of operations: 4,000 shares of 9%, $100 par, cumulative preferred stock and 45,000 shares of $10 par common stock. The amounts distributed as dividends are presented below. Determine the total and per-share dividends for each class of stock for each year by completing the schedule. Round dividends per share to the nearest cent. Enter "0" if no dividends are paid.

		Preferred		Common
Year	Dividends	Total	Per Share	Total	Per Share
1	$27,000	$	$	$	$
2	36,000	$	$	$	$
3	62,100	$	$	$	$

Answer 1

1. Prior to liquidating their partnership, Craig and Jenny had capital accounts of $74,060 and $125,920, respectively. The partnership assets were sold for $242,930. The partnership had $27,060 of liabilities. Craig and Jenny share income and losses equally. Determine the amount received by Jenny as a final distribution from liquidation of the partnership.
Jenny’s equity prior to liquidation		$ 1,25,920.00
Realization of asset sales	$ 2,42,930.00
Book value of assets ($74060 +125920 + $27,060)	$ 2,27,040.00
Gain on liquidation	$    15,890.00
Jenny’s share of gain (50% x $15,890)		$      7,945.00
Jenny’s cash distribution		$ 1,33,865.00
2. Emerson and Dakota formed a partnership dividing income as follows: Annual salary allowance to Emerson of $39,600 Interest of 10% on each partner's capital balance on January 1 Any remaining net income divided equally. Emerson and Dakota had $20,000 and $126,400, respectively, in their January 1 capital balances. Net income for the year was $222,400. How much net income should be distributed to Dakota?
Salary	$                 -
Interest (10% x $126,400)	$    12,640.00
Remaining income *	$ 1,68,160.00
Total distribution to Dakota	$ 1,80,800.00
* Remaining Income
Net Income	$ 2,22,400.00
salary Allowance	$  (39,600.00)
Interest (10% x $20,000)	$    (2,000.00)
Interest (10% x $126,400)	$  (12,640.00)
Remianing income	$ 1,68,160.00
.3. Malcolm has a capital balance of $63,200 after adjusting to fair market value. Celeste contributes $39,200 to receive a 25% interest in a new partnership with Malcolm. Determine the amount and recipient of the partner bonus
Equity of Malcom	$    63,200.00
Celeste’s contribution	$    39,200.00
Total equity after admitting Celeste	$ 1,02,400.00
Celeste’s equity interest	x 25%
Celeste’s equity after admission	$    25,600.00
Amount and recipient of the partner bonus
Celeste’s contribution	$    39,200.00
Celeste’s equity after admission	$    25,600.00
Bonus paid to Malcolm	$    64,800.00
4)
A company had stock outstanding as follows during each of its first three years of operations: 4,000 shares of 9%, $100 par, cumulative preferred stock and 45,000 shares of $10 par common stock. The amounts distributed as dividends are presented below. Determine the total and per-share dividends for each class of stock for each year by completing the schedule. Round dividends per share to the nearest cent. Enter "0" if no dividends are paid.
		Preferred		Common
Year	Dividends	Total	Per Share	Total	Per Share
1	$    27,000.00	$    27,000.00	$         6.75	$              -	$            -
2	$    36,000.00	$    36,000.00	$         9.00	$              -	$            -
3	$    62,100.00	$    45,000.00	$       11.25	$ 17,100.00	$         0.38