The Mohamed & Ahmed Co. reports net sales $ 150,000, cost of goods sold $ 50,000,...

The Mohamed & Ahmed Co. reports net sales $ 150,000, cost of goods sold $ 50,000, selling and administrative expenses $ 37,000. Interest allowances are Mohamed $9,000 and Ahmed $6,000; partner salary allowances are Mohamed $30,000 and Ahmed $25,000 and the remainder is shared 6:4 respectively.

Instructions: Indicate the division of net income to each partner and prepare journal entry for net income/net loss division.

Solution question 4:

Item	Mohamed	Ahmed	Total

Journal entry:

Date	Account title and explanation	Debit	Credit

Expert Solution


Allocation of Net Income
	Mohamed	Ahmed	Total
Salary Allowance	$ 30,000.00	$ 25,000.00	$ 55,000.00
Interest Allowance	$ 9,000.00	$ 6,000.00	$ 15,000.00
Net Loss in the ratio of (6:4)	$ -4,200.00	$ -2,800.00	$ -7,000.00
	$ 34,800.00	$ 28,200.00	$ 63,000.00

Net Income=Sales-cost of goods sold-Selling and Administrative expenses
Net Income=
Sales	$ 1,50,000.00
Less: COGS	$ -50,000.00
Gross Margin	$ 1,00,000.00
Less: Selling and Administrative expenses	$ -37,000.00
Net Income	$ 63,000.00


Journal Entry
General,Journal	Debit	Credit
Income Summary	$ 63,000.00
Mohmed Capital		$ 34,800.00
Ahmed Capital		$ 28,200.00
(Amount of Income distributed)

Salaries Allowance and Interest allowance are not expense of partnership,so it is not considered for calculating net income.

ekkarill92 answered 2 years ago

Inventories $150,000 Cost of Goods Sold $250,000 Administrative Expenses $50,000 Accumulated Depreciation $150,000 Sales $700,000 Depreciation...

Inventories $150,000 Cost of Goods Sold $250,000 Administrative Expenses $50,000 Accumulated Depreciation $150,000 Sales $700,000 Depreciation Expense $25,000 Selling Expenses $150,000 Common Stock Dividends $18,000 Interest Expense $18,000 Corporate Tax Rate 30% Prepare an income statement using the information given below. Make sure to identify gross profit, operating income, and net income. Please define what each number represents and why it is important to a business.

Consider a firm that reports the reports the following: sales $274,691, cost of goods sold $105,479 and...

Consider a firm that reports the reports the following: sales $274,691, cost of goods sold $105,479 and interest expense of $74,140. The firm has depreciation expense $57,257 and a 15% tax rate. During the last year the firm had an increase in gross fixed assets of $123,964 and a decrease in net operating working capital of $21,169. Calculate the firm's free cash flow. Your answer should be in dollars. So $30 million should be $30,000,000

The 2018 income statement of Adrian Express reports sales of $15,015,000, cost of goods sold of...

The 2018 income statement of Adrian Express reports sales of $15,015,000, cost of goods sold of $8,863,500, and net income of $1,570,000. Balance sheet information is provided in the following table. ADRIAN EXPRESS Balance Sheets December 31, 2018 and 2017 2018 2017 Assets Current assets: Cash $ 570,000 $ 730,000 Accounts receivable 1,340,000 970,000 Inventory 1,740,000 1,370,000 Long-term assets 4,770,000 4,210,000 Total assets $ 8,420,000 $ 7,280,000 Liabilities and Stockholders' Equity Current liabilities $ 1,990,000 $ 1,630,000...

Figures are in millions of dollars Net sales $ 2,473.8 Cost of goods sold (COGS) $...

Figures are in millions of dollars Net sales $ 2,473.8 Cost of goods sold (COGS) $ 1,316.2 Operating expenses (S&GA) $ 575.8 Inventory $ 250.1 Accounts receivable $ 36.7 Other current assets $ 68.9 Fixed assets $ 690.0 What's the net profit margin? $____ Show work. What's the net profit margin %? _____ Show work. What's the value of total assets? $____ Show work. What's the asset turnover ? $____ Show work. What's the return on assets (ROA)? $____ Show...

A company reports sales revenue of $314 million, cost of goods sold of $187 million, selling...

A company reports sales revenue of $314 million, cost of goods sold of $187 million, selling and administrative expenses of $77 million, depreciation of $20 million, and interest expense of $5 million. What is the company's after-tax operating income (to one decimal place) if the corporate tax rate is 30%?

A company reports sales revenue of $313 million, cost of goods sold of $183 million, selling...

A company reports sales revenue of $313 million, cost of goods sold of $183 million, selling and administration expenses of $79 million, depreciation of $20 million and interest expense of $9 million. What is the company's after-tax operating income (to one decimal place) if the corporate tax rate is 30%?

Q4. The 2021 income statement of Adrian Express reports sales of $20,710,000, cost of goods sold...

Q4. The 2021 income statement of Adrian Express reports sales of $20,710,000, cost of goods sold of $12,600,000, and net income of $1,980,000. Balance sheet information is provided in the following table. ADRIAN EXPRESS Balance Sheets December 31, 2021 and 2020 2021 2020 Assets Current assets: Cash $ 840,000 $ 930,000 Accounts receivable 1,775,000 1,205,000 Inventory 2,245,000 1,675,000 Long-term assets 5,040,000 4,410,000 Total assets $ 9,900,000 $ 8,220,000 Liabilities and Stockholders' Equity Current liabilities $ 2,074,000 $ 1,844,000 Long-term liabilities...

STORE 5 NET SALES = ? COST OF GOODS SOLD = $90.0 GROSS MARGIN-DOLLARS = ?...

STORE 5 NET SALES = ? COST OF GOODS SOLD = $90.0 GROSS MARGIN-DOLLARS = ? GROSS MARGIN-PERCENT = ? EXPENSE-DOLLARS = $41.1 EXPENSE-PERCENT = ? NET INCOME-DOLLARS = $0.5 NET INCOME-PERCENT = ?

Calculate net income based on the following information. Sales are $250, cost of goods sold is...

Calculate net income based on the following information. Sales are $250, cost of goods sold is $160, depreciation expense is $35, interest paid is $20, and the tax rate is 34%.

Record the net variance closed to cost of goods sold. Record the net variance allocated to ending inventories and Cost of goods sold.

Patel and Sons Inc. uses a standard cost system to apply factory overhead costs to units produced. Practical capacity for the plant is defined as 50,000 machine hours per year, which represents 25,000 units of output. Annual budgeted fixed factory overhead costs are $250,000 and the budgeted variable factory overhead cost rate is $4 per unit. Factory overhead costs are applied on the basis of standard machine hours allowed for units produced. Budgeted and actual output for the year...

Question