9. JJ&T Partnership has three partners, James Small, Josh Platt, and Turner Lyle, whoallocate net income according to the services provided and any remainder equally. Thepartnership agreement states that James and Turner will provide services for $2,500 amonth while Josh will provide services for $3,750. For the fiscal year ending December31, 2015, the partnership earned $192,600. Determine the amount allocated to eachpartner and prepare the journal entry to record the division of net income.

Partnership - A partnership is a type of corporate structure in which two or more individuals…

Answered: . JJ&T Partnership has three partners,…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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The partnership agreement of the G&P general partnership states that Gary will receive a guaranteed payment of $14,100, and that Gary and Prudence will share the remaining profits or losses in a 45/55 ratio. For year 1, the G&P partnership reports the following results: Sales revenue Gain on sale of land (§1231) Cost of goods sold Depreciation-MACRS Employee wages Cash charitable contributions Municipal bond interest Other expenses $ 91,500 7,500 (53,500) (15,600) (11,100) (5,300) 5,450 (5,100) Note: Negative amounts should be indicated by a minus sign. Required: a-1. How much ordinary income (loss) is allocated to Gary for the year? a-2. Compute Gary's share of separately stated items to be reported on his year 1 Schedule K-1, including his self-employment income (loss). Complete this question by entering your answers in the tabs below. Required A1 Required A2 How much ordinary income (loss) is allocated to Gary for the year? Note: Round your intermediate computations to the nearest…
Xavier and Yolanda have original investments of $54,200 and $107,000, respectively, in a partnership. The articles of partnership include the following provisions regarding the division of net income: interest on original investment at 20%; salary allowances of $26,000 and $32,000, respectively; and the remainder to be divided equally. How much of the net income of $108,500 is allocated to Yolanda? a. $75,036 Ob. $62,530 c. $53,400 Od. $21,400
A partnership of attorneys in the St. Louis, Missouri, area has the following balance sheet accounts as of January 1, 2018: According to the articles of partnership, Athos is to receive an allocation of 50 percent of all partnership profits and losses while Porthos receives 30 percent and Aramis, 20 percent. The book value of each asset and liability should be considered an accurate representation of fair value. For each of the following independent situations, prepare the journal entry or entries to be recorded by the partnership. (Round to nearest dollar.) Porthos, with permission of the other partners, decides to sell half of his partnership interest to D’Artagnan for $50,000 in cash. No asset revaluation or goodwill is to be recorded by the partnership. All three of the present partners agree to sell 10 percent of each partnership interest to D’Artagnan for a total cash payment of $25,000. Each partner receives a negotiated portion of this amount. Goodwill is recorded as a result…
Ries, Bax, and Thomas invested $40,000, $56,000, and $64,000, respectively, in a partnership. During its first calendar year, the firm earned $418, 200. Required: Prepare the entry to close the firm's Income Summary account as of its December 31 year-end and to allocate the $418, 200 net income under each of the following separate assumptions. 2. The partners agreed to share income and loss in the ratio of their beginning capital investments.
The partnership agreement of Jones, King, and Lane provides for the annual allocation of the business's profit or loss in the following sequence: Jones, the managing partner, receives a bonus equal to 15 percent of the business’s profit. Each partner receives 14 percent interest on average capital investment. Any residual profit or loss is divided equally. The average capital investments for 2021 were as follows: Jones $ 100,000 King 200,000 Lane 300,000 The partnership earned $48,000 net income for 2021. Prepare a schedule showing how the 2021 net income should be allocated to the partners. (Loss amounts should be indicated with a minus sign.)
Salem and Durham entered into a partnership to provide supply chain management and logistic services in the Silicon Valley region of California. In their agreed Articles of Partnership, the partners acknowledged the following: Sharing of profits and losses: Compensate each partner $125 per hour for their billable hourly consulting work performed. Salem receives an additional $3,000 monthly as the partnership’s Chief Operating Officer (COO); Durham receives an additional $2,500 monthly as the partnership’s Chief Technology Officer (CTO), Any remaining profits or losses are divided equally between the partners. Each partner is permitted but not required to withdraw no more than $800 per month from the partnership and such withdrawals will be accounted for as direct reductions of the withdrawing partner’s capital balance. They will begin their partnership with equal beginning capital balances. On January 1, 20x1, when they formed the partnership, each partners’…
McGill and Smyth have capital balances on January 1 of $41,000 and $34,000, respectively. The partnership income-sharing agreement provides for (1) annual salaries of $25,000 for McGill and $17,000 for Smyth, (2) interest at 12% on beginning capital balances, and (3) remaining income or loss to be shared 60% by McGill and 40% by Smyth. (a) (1) Prepare a schedule showing the distribution of net income, assuming net income is $85,000. (If an amount reduces the account balance then enter with a negative sign preceding the number or parenthesis, e.g. -15,000, (15,000).) Salary allowance Interest allowance Total salaries and interest DIVISION OF NET INCOME McGill Smyth $ Total $ Remaining income/ deficiency Total division of net income $ $ $ (2) Prepare a schedule showing the distribution of net income, assuming net income is $23,000. (If an amount reduces the account balance then enter with a negative sign preceding the number or parenthesis, e.g. -15,000, (15,000).) Salary allowance…
The partnership agreement of the G&P general partnership states that Gary will receive a guaranteed payment of $14,500, and that Gary and Prudence will share the remaining profits or losses in a 45/55 ratio. For year 1, the G&P partnership reports the following results: Sales revenue Gain on sale of land ($1231) Cost of goods sold Depreciation-MACRS Employee wages Cash charitable contributions Municipal bond interest Other expenses (Negative amounts should be indicated by a minus sign.) Problem 20-61 Part a (Algo) a-1. How much ordinary income (loss) is allocated to Gary for the year? a-2. Compute Gary's share of separately stated items to be reported on his year 1 Schedule K-1, including his self-employment income (loss). Req A1 Complete this question by entering your answers in the tabs below. Req A2 $ 80,700 6,900 (28,200) (18,100) (17,200) (4,600) Description Separately Stated Items on Schedule K-1: §1231 gains Cash charitable contributions Compute Gary's share of separately stated…
Morrison and Greene have decided to form a partnership. They have agreed that Morrison is to invest $156,000 and that Greene is to invest $52,000. Morrison is to devote one-half time to the business, and Greene is to devote full time. The following plans for the division of income are being considered: Equal division. In the ratio of original investments. In the ratio of time devoted to the business. Interest of 6% on original investments and the remainder equally Interest of 6% on original investments, salary allowances of $45,000 to Morrison and $80,000 to Greene, and the remainder equally Plan (e), except that Greene is also to be allowed a bonus equal to 20% of the amount by which net income exceeds the total salary allowances Required: For each plan, determine the division of the net income under each of the following assumptions: (1) net income of $163,000 and (2) net income of $240,000. Round answers to the nearest whole dollar.
The partnership of Angel Investor Associates began operations on January 1, 20Y5, with contributions from two partners as follows: Dennis Overton $180,000 Ben Testerman 120,000 The following additional partner transactions took place during the year: In early January, Randy Campbell is admitted to the partnership by contributing $75,000 cash for a 20% interest. Net income of $150,000 was earned in 2015. In addition, Dennis Overton received a salary allowance of $40,000 for the year The three partners agree to an income-sharing ratio equal to their capital balances after admitting Campbell. The partners' withdrawals are equal to half of the increase in their capital balances from salary allowance and income. Prepare a statement of partnership equity for the year ended December 31, 20Y5.
A Lululime fashion business partnership has agreed that half of the annual profit be distributed in proportion to each partner's investment in the partnership, and that the other half be distributed in proportion to the total number of hours that each partner worked in the business during the year. In 2020 the profit of the company was $82,780. How the company should allocated this profit to its three investors if the amounts invested by Howe, Denver, and Laura are $68,000, $27,000, and $43,000, and their hours of work for the year were 420, 1170, and 1230, respectively?

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