Question

In: Accounting

The Sunland Partnership reported profit of $61,300 for the year ended February 28, 2021. Salary allowances...

The Sunland Partnership reported profit of $61,300 for the year ended February 28, 2021. Salary allowances are $47,000 for H. Mills and $26,600 for S. Stone. Interest allowances of 6% are calculated on each partner's opening capital account balance. Capital account balances at March 1, 2020, were as follows: H. Mills $75,200 (Cr.) and S. Stone $48,700 (Cr.). Any remainder is shared equally.

Calculate the division of profit to each partner.

H. Mills S. Stone

Profit allocated to partners

$enter a dollar amount $enter a dollar amount

Solutions

Expert Solution

H.Mills S.Stone Total
Profit $       61,300
Salary Allowances $        47,000 $      26,600 $       73,600
Interest allowances $          4,512 $        2,922 $         7,434
Total Salary and interest allocation $        51,512 $      29,522 $       81,034
Balance of Profit $     -19,734
Balance allocated equally $         -9,867 $       -9,867 $     -19,734
Balance of Profit $                -  
Shares of Partners $        41,645 $      19,655 $       61,300

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