BROWN AND STELLA HAVE A PARTNERSHIP AGREEMENT WHICH INCLUDES THE FOLLOWING CONDITIONS REGARDING SHARING NET INCOME...

BROWN AND STELLA HAVE A PARTNERSHIP AGREEMENT WHICH INCLUDES THE FOLLOWING CONDITIONS REGARDING SHARING NET INCOME OR NET LOSS:

A SALARY ALLOWANCE OF $54 000 TO BROWN AND $36 000 TO STELLA.

AN INTEREST ALLOWANCE OF 10% ON CAPITAL BALANCES AT THE BEGINNING OF THE YEAR.

ANY REMAINDER TO BE DIVIDED 60% TO BROWN AND 40% TO STELLA.

THE CAPITAL BALANCE ON JANUARY 1, 2019, FOR BROWN AND STELLA WAS $90 000 AND $120 000, RESPECTIVELY. DURING THE YEAR 2019, BROWN AND STELLA WITHDREW EACH FROM THEIR CAPITAL ACCOUNTS $4000.

INSTRUCTIONS: COMPUTE EACH PARTNER CAPITAL BALANCES AT THE END OF 2019, UNDER THE FOLLOWING INDEPENDENT CONDITIONS:

1) NET INCOME IS $130 000. SHOW ALL SUPPORTING CALCULATIONS.

2) NET INCOME IS $90 000. SHOW ALL SUPPORTING CALCULATIONS.

Solutions

Expert Solution

ekkarill92 answered 1 year ago

Next > < Previous

Related Solutions

Carlin and Larve have a partnership agreement which includes the following provisions regarding sharing net income or net loss:

Carlin and Larve have a partnership agreement which includes the following provisions regarding sharing net income or net loss:1. A salary allowance of $54,000 to Carlin and $36,000 to Larve. 2. An interest allowance of 10% on capital balances at the beginning of the year. 3. The remainder to be divided 60% to Carlin and 4000 to Larve. The capital balance on January 1, 2008, for Carlin and Larve was $90,000 and $120,000, respectively. During 2008, the Carlin and Larve Partnership had...

Which of the following statements is true of partnerships? If the partners have no partnership agreement specifying...

Which of the following statements is true of partnerships? If the partners have no partnership agreement specifying how to divide profits and losses, then they share profits and losses equally. B. The profit sharing is always based on each partner's capital balances and any losses will be shared equally. C. It is legally required to share the profit and losses equally, irrespective of the partnership agreement. D. The stated ratio of profit sharing needs to be approved by the SEC.

Atleast 300 words please. How do we share partnership net income if there is no agreement...

Atleast 300 words please. How do we share partnership net income if there is no agreement as to each partner's share. What is liquidation? How does it differ from the dissolving (dissolution) of a partnership?

Which of the following statements is false regarding a general partnership?

Which of the following statements is false regarding a general partnership?A.It is easy to create.B.Income of the business is personal income.C.Business losses can be deducted from taxes.D.The partners are considered agents of the partnership.E.In most cases partners do not have personal liability for losses.

22. Assuming a company has net income, which of the following statements is TRUE regarding the...

22. Assuming a company has net income, which of the following statements is TRUE regarding the contribution margin per unit? a. It will decrease as the number of units sold increases. b. It will decrease as the number of units sold decreases. c. It indicates the amount that net income will increase with the sale of each additional unit. d. It indicates the amount that variable costs will decrease with the sale of each additional unit. 46 What combination of...

The partnership agreement of Alix, Gise, and Bosco provides for the following income ratio: (a) Alix,...

The partnership agreement of Alix, Gise, and Bosco provides for the following income ratio: (a) Alix, the managing partner, receives a salary allowance of $109000, (b) each partner receives 15% interest on average capital investment, and (c) remaining net income or loss is divided equally. The average capital investments for the year were: Alix $602000, Gise $1120000, and Bosco $1900000. If partnership net income is $532000, the amount allocated to Alix should be The partnership agreement of Alix, Gise, and...

The partnership agreement of Alix, Gise, and Bosco provides for the following income ratio: (a) Alix,...

The partnership agreement of Alix, Gise, and Bosco provides for the following income ratio: (a) Alix, the managing partner, receives a salary allowance of $107200, (b) each partner receives 15% interest on average capital investment, and (c) remaining net income or loss is divided equally. The average capital investments for the year were: Alix $594000, Gise $1110000, and Bosco $1800000. If partnership net income is $544000, the amount allocated to Alix should be $166700. $175200. $196300. $89100.

129. Masters, Hardy, and Rowen are dissolving their partnership. Their partnership agreement allocates income and losses...

129. Masters, Hardy, and Rowen are dissolving their partnership. Their partnership agreement allocates income and losses equally among the partners. The current period's ending capital account balances are Masters, $16,300, Hardy, $16,300, Rowen, $(3,300). After all the assets are sold and liabilities are paid, but before any contributions to cover any deficiencies, there is $29,300 in cash to be distributed. Rowen pays $3,300 to cover the deficiency in his account. The general journal entry to record the final distribution would...

Musa Moshref and Shaniqua Hollins have operated a successful firm for many years, sharing net income...

Musa Moshref and Shaniqua Hollins have operated a successful firm for many years, sharing net income and net losses equally. Taylor Anderson is to be admitted to the partnership on July 1 of the current year, in accordance with the following agreement: a. Assets and liabilities of the old partnership are to be valued at their book values as of June 30, except for the following: • Accounts receivable amounting to $2,400 are to be written off, and the allowance...

Musa Moshref and Shaniqua Hollins have operated a successful firm for many years, sharing net income...

Subjects