Question
In: Accounting
Ramer and Knox began a partnership by investing $82,000 and $123,000, respectively. During its first year,...
Ramer and Knox began a partnership by investing $82,000 and $123,000, respectively.
During its first year,
the partnership earned $240,000. Prepare calculations showing how
the $240,000 income should be allocated to the partners under each
of the following three separate plans for sharing income and
loss:
1. The partners failed to agree on a method to
share income.
Ramer and Knox began a partnership by investing $82,000 and $123,000, respectively.
During its first year,
the partnership earned $240,000. Prepare calculations showing how
the $240,000 income should be allocated to the partners under each
of the following three separate plans for sharing income and
loss:
1. The partners failed to agree on a method to
share income.
| Ramer | |
| Knox |
2. The partners agreed to share income and loss in proportion to their initial investments. Net income is $240,000. (Do not round intermediate calculations.)
|
3. The partners agreed to share income by
granting a $66,000 per year salary allowance to Ramer, a $40,000
per year salary allowance to Knox, 10% interest on their initial
capital investments, and the remaining balance shared equally. Net
income is $240,000. (Enter all allowances as
positive values. Enter losses as negative
values.)3. The partners agreed
to share income by granting a $66,000 per year salary allowance to
Ramer, a $40,000 per year salary allowance to Knox, 10% interest on
their initial capital investments, and the remaining balance shared
equally. Net income is $240,000. (Enter all
allowances as positive values. Enter losses as negative
values.)
3. The partners agreed to share income by granting
a $66,000 per year salary allowance to Ramer, a $40,000 per year
salary allowance to Knox, 10% interest on their initial capital
investments, and the remaining balance shared equally. Net income
is $240,000. (Enter all allowances as positive
values. Enter losses as negative
values.)
| Ramer | Knox | Total | |
| Net Income | |||
| Salary allowances | 0 | ||
| Interest allowances | 0 | ||
| Total salary and interest | |||
| Balance of income | |||
| Balance allocated equally | 0 | ||
| Balance of income | |||
| Shares of the partners | $0 | $0 | |
Solutions
ekkarill92 answered 2 years agoRelated Solutions
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