Question
In: Accounting
On January 1, 2016, Jack and Maya formed a partnership, JM Co. with the agreement that...
On January 1, 2016, Jack and Maya formed a partnership, JM Co.
with the agreement that income would be split equally by the
partners. Jack's initial investment consisted of cash of $5,000 and
a building with a fair market value of $105,000. Maya's initial
investment consisted of $110,000 cash. For 2016, the first year of
operations, the net loss for the partnership was $18,000. During
the first year, neither partner withdrew any money from the
partnership. The partnership has a December 31 year end.
On December 31, 2017, Maya decided to withdraw from the
business. During 2017, business profit was $20,000 and Maya's cash
withdrawals were $50,000. Upon her leaving the business at year
end, Maya received $65,000 cash.
Required:
Prepare a schedule to show the effect of these transactions on
equity over the two years, 2016 and 2017 before Maya's decision to
withdraw from the partnership.
Prepare the entry to withdraw Maya from the business
What is Jack's ending capital balance after Maya's
withdrawal?
Solutions
ekkarill92 answered 2 years agoRelated Solutions
The JM Partnership was formed to acquire land and subdivide it as residential housing lots. On...
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The JM Partnership was formed to acquire land and subdivide it as residential housing lots. On...
The JM Partnership was formed to acquire land and subdivide it
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land valued at $600,000 to the partnership, in exchange for a 50%
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held it for investment purposes (capital asset). The partnership
holds the land as inventory.
On the same date, Matt contributed land valued at $600,000 that
he had purchased in 2009 for $720,000. He also...
The partnership agreement of Alice, Baron & Crane was formed on January 2, 2017. The original...
The partnership agreement of Alice, Baron & Crane
was formed on January 2, 2017. The original cash investments were
as follows:
Alice
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Baron
144,000
Crane
216,000
According to the partnership contract, the partners were
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Salaries of $14,400 for Alice, $12,000 for Baron, and
$13,600 for Crane.
Interest at 12% on the average capital account balances
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Remainder divided 40% to Alice, 30% to Baron and 30% to
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Income before...
The partnership agreement of Alice, Baron & Crane was formed on January 2, 2017. The original...
The partnership agreement of Alice, Baron & Crane
was formed on January 2, 2017. The original cash investments were
as follows:
Alice $ 96,000
Baron 144,000
Crane 216,000
According to the partnership contract, the partners were
to be remunerated as follows:
Salaries of $14,400 for Alice, $12,000 for Baron, and
$13,600 for Crane.
Interest at 12% on the average capital account balances
during the year.
Remainder divided 40% to Alice, 30% to Baron and 30% to
Crane.
Income before partner withdrawals during the year...
1. Problem 10-35 (Algorithmic) (LO. 3, 9) The JM Partnership was formed to acquire land and...
1.
Problem 10-35 (Algorithmic) (LO. 3, 9)
The JM Partnership was formed to acquire land and subdivide it
as residential housing lots. On March 1, 2019, Jessica contributed
land valued at $888,000 to the partnership in exchange for a 50%
interest. She had purchased the land in 2011 for $621,600 and held
it for investment purposes (capital asset). The partnership holds
the land as inventory.
On the same date, Matt contributed land valued at $888,000 that
he had purchased in...
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,...
Dividing Partnership Net Income Required: Steve Jack and Chelsy Poodle formed a partnership, dividing income as...
Dividing Partnership Net Income
Required:
Steve Jack and Chelsy Poodle formed a partnership, dividing
income as follows:
Annual salary allowance to Jack of $176,400.
Interest of 5% on each partner's capital balance on January
1.
Any remaining net income divided to Jack and Poodle, 1:2.
Jack and Poodle had $77,600 and $82,520, respectively, in their
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How much is distributed to Jack and Poodle?
Note: Compute partnership share to two...
Dividing Partnership Net Income Required: Steve Jack and Chelsy Stevens formed a partnership, dividing income as...
Dividing Partnership Net Income
Required:
Steve Jack and Chelsy Stevens formed a partnership, dividing
income as follows:
Annual salary allowance to Jack of $87,360.
Interest of 6% on each partner's capital balance on January
1.
Any remaining net income divided to Jack and Stevens, 1:2.
Jack and Stevens had $63,000 and $87,000, respectively, in their
January 1 capital balances. Net income for the year was $156,000.
How much is distributed to Jack and Stevens?
Note: Compute partnership share.
Jack: $...
1. Rick, Mary, and Joe formed a partnership on January 1, 2017,with investments of $100,000,...
1. Rick, Mary, and Joe formed a partnership on January 1, 2017,
with investments of $100,000, $150,000, and $200,000, respectively.
For division of income, they agreed to (1) interest of 10% of the
beginning capital balance each year, (2) annual compensation of
$10,000 to Mary, and (3) sharing the remainder of the income or
loss in a ratio of 20% for Rick, and 40% each for Mary and Joe. Net
income was $150,000 in 2017 and $180,000 in 2018.Each partner...
On January 1, 2017, the dental partnership of Angela, Diaz, and Krause was formed when the...
On January 1, 2017, the dental partnership of Angela, Diaz, and
Krause was formed when the partners contributed $54,000, $82,000,
and $84,000, respectively. Over the next three years, the business
reported net income and (loss) as follows:
2017
$
94,000
2018
66,000
2019
(49,000
)
During this period, each partner withdrew cash of $17,000 per
year. Krause invested an additional $6,000 in cash on February 9,
2018.
At the time that the partnership was created, the three partners
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