Day and Night formed an accounting partnership in 2019. Capital transactions for Day and Night during...

Day and Night formed an accounting partnership in 2019. Capital transactions for Day and Night during 2019 are as follows:

Date	Transaction	Amount
Day
1/1	Beginning balance	$75,000
4/1	Withdrawal	18,750
6/1	Investment	37,500
11/1	Investment	18,750
Night
1/1	Beginning balance	$37,500
7/1	Investment	18,750
10/1	Withdrawal	9,375

Partnership net income for the year ended December 31, 2019; is $68,400 before considering salaries or interest.

Required:

Determine the amount of profit that is to be allocated to Day and Night in accordance with each of the following independent profit‐sharing agreements:

Day and Night failed to provide a profit‐sharing arrangement in the articles of partnership and fail to compromise on an agreement.
Net income is to be allocated 60% to Day and 40% to Night.
Net income is to be allocated in the ratio of ending capital balances.
Net income is to be allocated in the ratio of average capital balances.
Interest of 15% is to be granted on average capital balances, salaries of $15,000 and $8,250 are to be allocated to Day and Night, respectively, and the remainder is to be divided equally.

Solutions

Expert Solution

ekkarill92 answered 1 year ago

Next > < Previous

Related Solutions

Farmer and Taylor formed a partnership with capital contributions of $205,000 and $255,000, respectively. Their partnership...

Farmer and Taylor formed a partnership with capital contributions of $205,000 and $255,000, respectively. Their partnership agreement calls for Farmer to receive a $72,000 per year salary. The remaining income or loss is to be divided equally. Assuming net loss for the current year is $16,000, the journal entry to allocate the net loss is: Debit Taylor, Capital, $44,000; Credit Income Summary, $16,000; Credit Farmer, Capital, $28,000. Debit Income Summary, $16,000; Debit Farmer, Capital, $28,000; Credit Taylor, Capital, $44,000. Debit...

Banksia Company completed the following transactions during 2018-2019. The annual accounting period ends 30 June 2019.

Banksia Company completed the following transactions during 2018-2019. The annual accounting period ends 30 June 2019. a) Purchased inventory on credit at cost of AUD 16,800; perpetual inventory system is used. b) Received a customer deposit of AUD 18,000 from ABC Ltd for services to be rendered in the future. c) Borrowed AUD 900,000 from the bank on 1 March 2019 by giving the bank a six-month, 9% interest bearing note payable. d) Performed AUD 8,000 of the services...

Sharon and Nancy formed a partnership by making capital contributions of $130,000 and $195,000 respectively. The...

Sharon and Nancy formed a partnership by making capital contributions of $130,000 and $195,000 respectively. The annual partnership income of $230,000 is to be allocated assuming a salary allowance of $40,000 to Sharon and $35,000 to Nancy; interest allowances of 12% on their initial capital investments; and the balance shared equally. Prepare the entries to record the initial capital investments, the allocation of net income, and close the partner's withdrawal accounts assuming that Sharon withdrew $50,000 and Nancy withdrew $45,000.

1. Farmer and Taylor formed a partnership with capital contributions of $280,000 and $330,000, respectively. Their...

1. Farmer and Taylor formed a partnership with capital contributions of $280,000 and $330,000, respectively. Their partnership agreement calls for Farmer to receive a $86,000 per year salary. The remaining income or loss is to be divided equally. Assuming net income for the current year is $231,000, the journal entry to allocate net income is: 2. Christie and Jergens formed a partnership with capital contributions of $210,000 and $310,000, respectively. Their partnership agreement calls for Christie to receive a $51,000...

Nizwa Municipality follows fund accounting. The following transactions took place during the year 2019. The government...

Nizwa Municipality follows fund accounting. The following transactions took place during the year 2019. The government imposes a tax on Liquified Petroleum Gas (LPG) to compensate the loss in revenue due to decline in oil prices. This tax revenue is planned to be used exclusively for improving the health facilities in the local health centers. The tax revenue collected in Al Dakhiliyah Governorate until for the year 2019 amounts to RO 40,000. The governorate spent RO 37,000 for purchase of...

Nizwa Municipality follows fund accounting. The following transactions took place during the year 2019. 1. The...

Nizwa Municipality follows fund accounting. The following transactions took place during the year 2019. 1. The city collects property taxes from its citizens amounting to RO 80,000. The city plans to use this for financing the general operating activities planned by Al Dakiliyah governorate. You are required to state for each of the transactions above,:  The fund in which Fund these transactions will be recorded  Pass journal entries in each of the respective funds  Briefly explain the...

Bats are nocturnal mammals, feeding on insects at night and sleeping during the day. Many species...

Bats are nocturnal mammals, feeding on insects at night and sleeping during the day. Many species of bats use bridges as daytime sleeping places. Their choice of daytime position on the undersurface of a bridge appears to be non-random. One theory is that the bats choose locations that will keep them safer from predators. The beams that support a bridge create two kinds of spaces: wide (approximately 55 cm) and narrow (approximately 17 cm); biologists believe the narrow spaces provide...

Accounting and Financial Reporting II On December 31, a partnership has total partnership capital as follows:...

Accounting and Financial Reporting II On December 31, a partnership has total partnership capital as follows: Partner #1, capital 100,000 Partner #2, capital 150,000 Partner #3, capital 200,000 Total partnership capital 450,000 The partners allocate income and losses 20% to partner #1, 30% to partner #2 and 50% to partner #3. On December 31, Partner #3 retires from the partnership and is paid $225,000 in PARTNERSHIP cash to settle his interest in the partnership. Prepare any necessary journal entries on...

On January 1, 2019, MARIA, MARA, MARIZ, and MARLA formed 4M Trading Co., a partnership with...

On January 1, 2019, MARIA, MARA, MARIZ, and MARLA formed 4M Trading Co., a partnership with capital contributions as follows : MARIA, P50,000; MARA, 25,000; MARIZ, P25,000; and MARLA, P20,000. The partnership contract provided that each partner shall receive a 5% interest on contributed capital, and that MARIA and MARA shall receive salaries of P5,000 and P3,000, respectively. The contract also provided that MARIZ shall receive a minimum of P2,500 per annum, and MARLA a minimum of P6,000 per annum,...

Richmond Company engaged in the following transactions during 2019:

Payable TransactionsRichmond Company engaged in the following transactions during 2019:Purchased $160,000 of supplies from ABC Supplies on February 16. Amount due in full on March 31.Paid for 25% of the purchased merchandise (Transaction a) on February 26.On March 31 negotiated a payment extension with ABC for the remainder of the balance from the February 16 purchase by signing a 1-year, 10% note.Borrowed $300,000 on a 10-month, 8% interest-bearing note on April 30.Purchased $78,000 of merchandise on June 4. Amount due...

Subjects