Question

Jones, Silva, and Thompson form a partnership and agree to allocate income equally after recognition of 10% interest on beginning capital balances and monthly salary allowances of $2,010 to Jones and $1,490 to Thompson. Capital balances on January 1 were as follows: Jones $39,900 Silva 25,200 Thompson 29,900. Calculate the net income (loss) allocation to each partner under each of the following independent situations.

1.Net income for the year is $99,200.

2.Net income for the year is $38,450.

3.Net loss for the year is $15,490.

(Enter loss allocation using either a negative sign preceding the number e.g. -2,945 or parentheses e.g. (2,945).)

				Jones		Silva		Thompson
1.		Income (Loss) allocation		$		$		$
2.		Income (Loss) allocation		$		$		$
3.		Income (Loss) allocation		$		$		$

Answer 1

Answer
a.	Distribution of $ 99200 income:
1	Particulars	Jones	Silva	Thompson	Total
	Net Income				99200
	a. Interest on Capital	$         3,990	$         2,520	$         2,990	$        -9,500
	b. Salary allowance	$       24,120	-	$       17,880	$      -42,000
	c. Balance				$       47,700
	d. Balance allocation	$       15,900	$       15,900	$       15,900	$       47,700
	e. Income (loss) allocation	$       44,010	$       18,420	$       36,770	$       99,200
a.	Distribution of $ 38450 income:
2	Particulars	Jones	Silva	Thompson	Total
	Net income				38450
	a. Interest on Capital	$         3,990	$         2,520	$         2,990	$        -9,500
	b. Salary allowance	$       24,120	-	$       17,880	$      -42,000
	c. Balance				$      -13,050
	d. Balance allocation	$        -4,350	$        -4,350	$        -4,350	$      -13,050
	e. Income (loss) allocation	$       23,760	$        -1,830	$       16,520	$       38,450
a.	Distribution of $ 15490 income:
3	Particulars	Jones	Silva	Thompson	Total
	Net Income				15490
	a. Interest on Capital	$         3,990	$         2,520	$         2,990	$        -9,500
	b. Salary allowance	$       24,120	-	$       17,880	$      -42,000
	c. Balance				$      -36,010
	d. Balance allocation	$ -12,003.33	$ -12,003.33	$ -12,003.33	$ -36,009.99
	e. Income (loss) allocation	$       16,107	$        -9,483	$         8,867	$       15,490