Question

In: Accounting

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 sales of $495,000, cost of goods sold of $290,000, and operating expenses of $75,000.


 Instructions 

Prepare a Division of Net Income to each of the partners.

Solutions

Expert Solution

ekkarill92 answered 2 years ago
Next > < Previous

Related Solutions

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,...
The partnership agreement of Ahmed and Ali has the following provisions: 1 - Partners are to...
The partnership agreement of Ahmed and Ali has the following provisions: 1 - Partners are to earn 10% interest on their average capital balances 2 - Ali is to earn a 5% bonus on any net income above 40,000 3 - Ahmed and Ali are to earn salaries of 25,000 and 20,000 respectively 4 - Any remaining income or loss is to be divided using a 4:2 ratio Ahmed's average capital balance is 130,000 and Ali's is 30,000 Net income...
1. in the absence of a partnership agreement, the law says that income and loss should...
1. in the absence of a partnership agreement, the law says that income and loss should be allocated a. based on their length of time with the partnership b. equally c. according to their capital investments d. based on salary allowances 2. the number of shares that a corporations charter allows it to sell is referred to as a. authorized stock b. outstanding stock c. issued stock d. common stock 3. shamrock company had a net income of $30,000. the...
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.
The partnership agreement of Ahmad, Fatima, and Ali provides for annual distribution of profit and loss...
The partnership agreement of Ahmad, Fatima, and Ali provides for annual distribution of profit and loss in the following sequence: • Fatima, the managing partner, receives a bonus of 10% of net income. • Each partner receives 5% interest on average capital investment. • Residual profit or loss is to be divided 4:2:4. • Average capital investments for 2019 were: Ahmad $270,000 Fatima $180,000 Ali $120,000 At the end of 2019, the partnership reported net loss before interest, salaries, and...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT