Norr and Caylor established a partnership on January 1, 2017. Norr invested cash of $100,000 and...

Norr and Caylor established a partnership on January 1, 2017. Norr invested cash of $100,000 and Caylor invested $30,000 in cash and equipment with a book value of $40,000 and fair value of $50,000. For both partners, the beginning capital balance was to equal the initial investment. Norr and Caylor agreed to the following procedure for sharing profits and losses: - 12% interest on the yearly beginning capital balance - $10 per hour of work that can be billed to the partnership's clients - the remainder divided in a 3:2 ratio The Articles of Partnership specified that each partner should withdraw no more than $1,000 per month, which is accounted as direct reduction of that partner’s capital balance. For 2017, the partnership's income was $70,000. Norr had 1,000 billable hours, and Caylor worked 1,400 billable hours. In 2018, the partnership's income was $24,000, and Norr and Caylor worked 800 and 1,200 billable hours respectively. Each partner withdrew $1,000 per month throughout 2017 and 2018.

Required: Determine the amount of net income allocated to each partner for 2017.

Expert Solution

ekkarill92 answered 2 years ago

Norr and Caylor established a partnership on January 1, 2019.Norr invested cash of $100,000 and...

Norr and Caylor established a partnership on January 1, 2019. Norr invested cash of $100,000 and Caylor invested $30,000 in cash and equipment with a book value of $40,000 and fair value of $50,000. For both partners, the beginning capital balance was to equal the initial investment. Norr and Caylor agreed to the following procedure for sharing profits and losses: 12% interest on the yearly beginning capital balance $10 per hour of work that can be billed to the partnership's clients the remainder...

Norr and Caylor established a partnership on January 1, 2010. Norr invested cash of $100,000 and...

Norr and Caylor established a partnership on January 1, 2010. Norr invested cash of $100,000 and Caylor invested $30,000 in cash and equipment with a book value of $40,000 and fair value of $50,000. For both partners, the beginning capital balance was to equal the initial investment. Norr and Caylor agreed to the following procedure for sharing profits and losses:- 12% interest on the yearly beginning capital balance;- $10 per hour of work that can be billed to the partnership's...

Norr and Caylor established a partnership on January 1, 2019. Norr invested cash of $100,000 and...

Norr and Caylor established a partnership on January 1, 2019. Norr invested cash of $100,000 and Caylor invested $30,000 in cash and equipment with a book value of $40,000 and fair value of $50,000. For both partners, the beginning capital balance was to equal the initial investment. Norr and Caylor agreed to the following procedure for sharing profits and losses: 12% interest on the yearly beginning capital balance $10 per hour of work that can be billed to the partnership's...

Q1. X and Y established a partnership on January 1, 2018. X invested cash of $60,000...

Q1. X and Y established a partnership on January 1, 2018. X invested cash of $60,000 and B invested $70,000 in cash and equipment with a book value of $30,000 and fair value of $50,000. For both partners, the beginning capital balance was to equal the initial investment. X and Y agreed to the following procedure for sharing profits and losses: - 9% interest on the yearly beginning capital balance - $10 per hour of work that can be billed...

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...

In January of the current year, Don and Steve each invested $100,000 cash to form a...

In January of the current year, Don and Steve each invested $100,000 cash to form a corporation to conduct business as a retail golf equipment store. On January 5, they paid Bill, an attorney, to draft the corporate charter, file the necessary forms with the state, and write the bylaws. They leased a store building and began to acquire inventory, furniture, display equipment and office equipment in February. They hired a sales staff and clerical personnel in March and conducted...

Greek Tavern Co was established on July 1, 2020 by a cash investment of $100,000. The...

Greek Tavern Co was established on July 1, 2020 by a cash investment of $100,000. The following is the Trial Balance prepared on September 30, 2020. Account Title Debit Credit Cash $65,000 Accounts Receivable 70,000 Supplies 15,000 Prepaid Rent 50,000 Office Equipment 75,000 Accounts Payable $5,000 Unearned Revenue 25,000 Notes Payable 75,000 Owner's Capital 100,000 Owner's Drawings 37,500 Service Revenue 150,000 Salaries and Wages expense 25,000 Commission expense 15,000 Utilities expense 2,500 TOTAL $355,000 $355,000 During the three month period,...

1. James Michaels invested $25,000 for a one-third interest in the Jabo Partnership on January 1...

1. James Michaels invested $25,000 for a one-third interest in the Jabo Partnership on January 1 of the current year. The partnership purchased a building site on February 5 at a cost of $200,000, paying $50,000 as a down payment and obtaining a mortgage of $150,000 at 12 percent annual interest for only three years, then full payment of principal. Because of an unexpected rezoning of the property, it substantially increased in value. Jabo Partnership broke exactly even for the...

Partnership Income Allocation—Various Options The January 1, 2017, balance sheet of the partnership of Linda Kingston...

Partnership Income Allocation—Various Options The January 1, 2017, balance sheet of the partnership of Linda Kingston and Jeannette Allen is shown below. Assets Liabilities and Capital Cash $12,000 Liabilities $34,000 Other assets 108,000 Capital - Kingston 35,600 Capital - Allen 50,400 Total assets $120,000 Total liabilities and capital $120,000 The partnership reported revenues of $48,000 and expenses of $33,000 for 2017. Neither partner withdrew funds from the partnership during the year. Kingston invested $4,800 in the firm on June 28,...

On May 1, Gosworth and Jordan formed a partnership. Gosworth contributed cash of $100,000 and equipment...

On May 1, Gosworth and Jordan formed a partnership. Gosworth contributed cash of $100,000 and equipment valued at $142,000. Jordan contributed land valued at $130,000 and a building valued at $250,000. The partnership also assumed responsibility for Jordan's $120,000 long-term note payable associated with the land and building. The partners agreed to share income as follows: Gosworth is to receive a salary allowance of $38,000, both are to receive an annual interest allowance of 8% of their beginning-year capital investments,...

Question