0 DIVIDING INCOME OR LOSS- Handout 12-2B B. Manilow and W. How have capital balances on January 1 of $50,000 and $40,000, respectively. The partnership income sharing agreement provides for (1) annual salaries of $14,000 for Manilow and $12,000 for How, (2) interest at 10% on beginning capital balances, and (3) remaining income or loss to be shared 70% by Manilow and 30% by How. a) Prepare a schedule showing the distribution of net income, assuming net income is 5 (1) $55,000 and (2) $30,000. (Review the example on page 485 of text.) b) Journalize the allocation of net income in each of the situations above. SOLUTION HINTS a) (1) M, Cap. $33,000 (2) H, Cap. $14,500

0 DIVIDING INCOME OR LOSS- Handout 12-2B B. Manilow and W. How have capital balances on January 1 of $50,000 and $40,000, respectively. The partnership income sharing agreement provides for (1) annual salaries of $14,000 for Manilow and $12,000 for How, (2) interest at 10% on beginning capital balances, and (3) remaining income or loss to be shared 70% by Manilow and 30% by How. a) Prepare a schedule showing the distribution of net income, assuming net income is 5 (1) $55,000 and (2) $30,000. (Review the example on page 485 of text.) b) Journalize the allocation of net income in each of the situations above. SOLUTION HINTS a) (1) M, Cap. $33,000 (2) H, Cap. $14,500

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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