question 1) Journalize the formation of this partnership. M. Jaren and P. Mohan are forming a...

question 1) Journalize the formation of this partnership.

M. Jaren and P. Mohan are forming a partnership on May 1. M. Jaren brings with her $10300 cash and an automobile that was purchased for $30,000. Accumulated amortization on the automobile is $9000.

P. Mohan brings with him $4400 cash, and land with a fair market value of $60,000. The partners agree that the fair market value of the automobile is $20500.

question 2) R. Ross and M. Mike have a partnership that has earned a net income of $90000 this year. It is now December 31.

Journalize the allocation of net income to each partner based on the following scenarios:

a) Ross and Mike divide the profits equally.

b) Ross has a capital balance of $6000 and Mike has a capital balance of $40,000. They each get paid a salary of $5000, earn 10% interest from their capital balances, and the remainder of net income is divided equally.

question 3) R. Zane and S. Kris are partners. According to their partnership agreement, they each earn a salary of $10,000 each year, and income is split 4:3 between Zane and Kris, respectively.

Their business suffered a loss of $57500 this past year. It is now December 31.

Expert Solution

Question 1

Date	Account	Debit	Credit
May 1	Bank	10300
	Automobile	20500
	M. Jaren's Capital Account		30800
	(Being Capital introduced by M. Jaren)

May 1	Bank	4400
	Land	60000
	P. Mohan's Capital Account		64400
	(Being Capital introduced by P.Mohan)

Question 2

Net Income	90000
Less: Salary (5000 * 2)	10000
Less: Interest on Capital
Ross: 6000 * 10%	600
Mike: 40000 * 10%	4000
Net profit for distribution	75400

Journal

Date	Account	Debit	Credit
Dec 31	Profit & Loss Appropriation Account	75400
	Ross's Capital A/c		37700
	Mike's Capital A/c		37700
	(Being profits distributed equally among partners)

Question 3

Business Loss	57500
Less: Salary to partners	20000
Net Profit/(Loss)	(77500)

Journal:

Date	Account	Debit	Credit
Dec 31	Zane Capital A/c	44286
	Kris Capital A/c	33214
	Profit & Loss Appropriation Account		77500
	(Being loss distributed in ratio 4:3 among partners)

ekkarill92 answered 1 year ago

Sam is interested in forming a partnership and is conducting research into partnership agreements. Based on...

Sam is interested in forming a partnership and is conducting research into partnership agreements. Based on his reading of his Business Law textbook, one of the following statements is not correct. Choose the statement that is INCORRECT A. It is a good idea to create a partership through evidence in writing B. the circumstances in which the partnership will be dissolved is an important matter and should be included in a contract creating a partnership C. Even where parties clearly...

The choosen Company is AMAZON. Partnership: The company is considering forming a partnership and wants to...

The choosen Company is AMAZON. Partnership: The company is considering forming a partnership and wants to be sure it understands the key issues regarding partnership formation, income distribution, and liquidation. A. Explain the process and methods used to account for partnership formation. How do these methods impact the firm’s balance sheet? B. Illustrate how the company could split profits and losses. C. Describe what happens if the partnership doesn’t do well and the company has to dissolve it, or one...

Trump, Clinton, and Mueller are forming a partnership. &n

Trump, Clinton, and Mueller are forming a partnership. Trump and Clinton are each contributing $100,000 while Mueller is contributing $70,000 and his expertise. They will be equal partners and each will show the same beginning capital account. REQUIRED: A) MAKE THE JOURNAL ENTRY USING THE BONUS METHOD B) MAKE THE JOURNAL ENTRY USING THE GOODWILL METHOD

1. fontaine and Monroe are forming a partnership. Fontaine invests a building that has a market...

1. fontaine and Monroe are forming a partnership. Fontaine invests a building that has a market value of $356,000; the partnership assumes responsibility for a $128,000 note secured by a mortgage on the property. Monroe invests $103,000 in cash and equipment that has a market value of $78,000. For the partnership, the amounts recorded for total assets and for total capital account are: 2. Fontaine and Monroe are forming a partnership. Fontaine invests a building that has a market value...

compare a partnership creation in comparasion to a company formation

Formation of partnership Assume that two individuals agree to form a partnership. Partner A is contributing...

Formation of partnership Assume that two individuals agree to form a partnership. Partner A is contributing an operating business that reports the following balance sheet: Cash $7,500 Accounts payable $22,500 Receivables 15,000 Accrued liabilities 15,000 Inventories 30,000 Total liabilities $37,500 Total assets $52,500 Net assets $15,000 Partner B is contributing cash of $37,500. The partners agree that the initial capital of the partnership should be shared equally. Prepare the journal entry to record the capital contributions of the partners using...

Phillip and Case are in the process of forming a partnership to import Belgian chocolates, to...

Phillip and Case are in the process of forming a partnership to import Belgian chocolates, to which Phillip will contribute one-third time and Case full time. They have discussed the following alternative plans for sharing profit and losses. a. In the ratio of their initial investments, which they have agreed will be $164,000 for Phillip and $246,000 for Case. b. In proportion to the time devoted to the business. c. A salary allowance of $4,000 per month to Case and...

Question