McGill and Smyth have capital balances on January 1 of $48,000 and $30,000, respectively. The partnership...

McGill and Smyth have capital balances on January 1 of $48,000 and $30,000, respectively. The partnership income-sharing agreement provides for (1) annual salaries of $22,000 for McGill and $18,000 for Smyth, (2) interest at 10% on beginning capital balances, and (3) remaining income or loss to be shared 70% by McGill and 30% by Smyth.

(1) Prepare a schedule showing the distribution of net income, assuming net income is $71,000

(2) Prepare a schedule showing the distribution of net income, assuming net income is $26,000.

(3)Journalize the allocation of net income in each of the situations above

Solutions

Expert Solution

ekkarill92 answered 1 year ago

Next > < Previous

Related Solutions

McGill and Smyth have capital balances on January 1 of $40,000 and $30,000, respectively. The partnership...

McGill and Smyth have capital balances on January 1 of $40,000 and $30,000, respectively. The partnership income-sharing agreement provides for (1) annual salaries of $15,000 for McGill and $10,000 for Smyth, (2) interest at 10% on beginning capital balances, and (3) remaining income or loss to be shared 60% by McGill and 40% by Smyth. Prepare a schedule showing the distribution of net income, assuming net income is $65,000. (If an amount reduces the account balance then enter with a...

McGill and Smyth have capital balances on January 1 of $46,000 and $38,000, respectively. The partnership...

McGill and Smyth have capital balances on January 1 of $46,000 and $38,000, respectively. The partnership income-sharing agreement provides for (1) annual salaries of $25,000 for McGill and $20,000 for Smyth, (2) interest at 10% on beginning capital balances, and (3) remaining income or loss to be shared 70% by McGill and 30% by Smyth. (1) Prepare a schedule showing the distribution of net income, assuming net income is $79,000. (If an amount reduces the account balance then enter with...

Tamer, Lune and Nazra have a partnership. Their capital balances are $180,000, $260,000 and $300,000, respectively....

Tamer, Lune and Nazra have a partnership. Their capital balances are $180,000, $260,000 and $300,000, respectively. They share profits and losses 25%, 35% and 40%, respectively. Rana wants to become a partner with a 10 percent share in partnership capital with a $120,000 cash contribution to the partnership. The fair market value for the partner is equal to book values Required: 1- Calculate Tamer, Lune and Nazra and Rana ending capital balances under the Bonus Method and Goodwill Method. 2-...

Kuzma, Folkert and Tucker are partners with capital account balances of $30,000. $75,000, and $45,000, respectively....

Kuzma, Folkert and Tucker are partners with capital account balances of $30,000. $75,000, and $45,000, respectively. Income and losses are divided in a 4:4:2 ratio. When Tucker decided to withdraw, Tucker was then given $15,000 cash and a note for $40,000 for his withdrawal from the partnership. Using the Bonus Method, prepare the journal entry to record Tucker's withdrawal. Problem 2 Dave, Allen and Matt share profits and losses in the ratio of 50:30:20. Allen withdrew from the partnership December...

Sharp and Townson had capital balances of $80,000 and $150,000, respectively on January 1, 2014 of...

Sharp and Townson had capital balances of $80,000 and $150,000, respectively on January 1, 2014 of the current year. On May 8, Sharp invested an additional $20,000 in the partnership (already entered). During the year, Sharp and Townson withdrew $35,000 and $55,000, respectively (Already entered). At the end of the year, there was $500,000 balance in the 'Revenue' account and $380,000 in the 'Expenses' account. Sharp and Townson have agreed to split on a 2:1 basis, respectively. (xx.xx%) 1. Journalize...

Carpenter, Kneller, and Hartley are partners. Their Capital account balances were $35,000, $30,000, and $24,000, respectively,...

Carpenter, Kneller, and Hartley are partners. Their Capital account balances were $35,000, $30,000, and $24,000, respectively, at the beginning of the current fiscal year. The partnership agreement provides for an allowance of interest at the rate of 6% on the capital balances at the beginning of the year, and salary allowances of $8,000, $11,000, and $12,000, respectively. The remaining partnership net income is to be divided 371/2% / 371/2% / 25%. 1. If the net income for that year was...

The Prince-Robbins partnership has the following capital account balances on January 1, 2018: Prince, Capital $...

The Prince-Robbins partnership has the following capital account balances on January 1, 2018: Prince, Capital $ 160,000 Robbins, Capital 150,000 Prince is allocated 80 percent of all profits and losses with the remaining 20 percent assigned to Robbins after interest of 8 percent is given to each partner based on beginning capital balances. On January 2, 2018, Jeffrey invests $91,000 cash for a 20 percent interest in the partnership. This transaction is recorded by the goodwill method. After this transaction,...

The Prince-Robbins partnership has the following capital account balances on January 1, 2018: Prince, Capital $...

The Prince-Robbins partnership has the following capital account balances on January 1, 2018: Prince, Capital $ 90,000 Robbins, Capital 80,000 Prince is allocated 60 percent of all profits and losses with the remaining 40 percent assigned to Robbins after interest of 9 percent is given to each partner based on beginning capital balances. On January 2, 2018, Jeffrey invests $49,000 cash for a 20 percent interest in the partnership. This transaction is recorded by the goodwill method. After this transaction,...

The Prince-Robbins partnership has the following capital account balances on January 1, 2018: Prince, Capital $...

The Prince-Robbins partnership has the following capital account balances on January 1, 2018: Prince, Capital $ 110,000 Robbins, Capital 100,000 Prince is allocated 70 percent of all profits and losses with the remaining 30 percent assigned to Robbins after interest of 8 percent is given to each partner based on beginning capital balances. On January 2, 2018, Jeffrey invests $61,000 cash for a 20 percent interest in the partnership. This transaction is recorded by the goodwill method. After this transaction,...

The Prince-Robbins partnership has the following capital account balances on January 1, 2018: Prince, Capital $...

Subjects