1. A partnership began its first year of operations with the following capital balances: Young, Capital: $143,000 Eaton, Capital: $104,000 Thurman, Capital: $143,000 The Articles of Partnership stipulated that profits and losses be assigned in the following manner: Young was to be awarded an annual salary of $26,000 and $13,000 salary was to be awarded to Thurman. Each partner was to be attributed with interest equal to 10% of the capital balance as of the first day of the year. The remainder was to be assigned on a 5:2:3 basis to Young, Eaton, and Thurman, respectively. Each partner withdrew $13,000 per year. Assume that the net loss was $26,000. What was the ending balance in the capital account of each partner?

1. A partnership began its first year of operations with the following capital balances: Young, Capital: $143,000 Eaton, Capital: $104,000 Thurman, Capital: $143,000 The Articles of Partnership stipulated that profits and losses be assigned in the following manner: Young was to be awarded an annual salary of $26,000 and $13,000 salary was to be awarded to Thurman. Each partner was to be attributed with interest equal to 10% of the capital balance as of the first day of the year. The remainder was to be assigned on a 5:2:3 basis to Young, Eaton, and Thurman, respectively. Each partner withdrew $13,000 per year. Assume that the net loss was $26,000. What was the ending balance in the capital account of each partner?

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter15: Partnership Accounting

Section: Chapter Questions

Problem 1PA: The partnership of Tatum and Brook shares profits and losses in a 60:40 ratio respectively after...

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The partnership of Tatum and Brook shares profits and losses in a 60:40 ratio respectively after Tatum receives a 10,000 salary and Brook receives a 15,000 salary. Prepare a schedule showing how the profit and loss should be divided, assuming the profit or loss for the year is: A. $40,000 B. $25,000 C. ($5,000) In addition, show the resulting entries to each partners capital account. Tatums capital account balance is $50,000 and Brooks is $60,000.
A B C partnership began its first year of operations with the following capital balances: A, Capital: $143,000 B, Capital: $104,000 C, Capital: $143,000 The Articles of Partnership stipulated that profits and losses be assigned in the following manner:  A was to be awarded an annual salary of $26,000 with $13,000 salary assigned to C  Each partner was to be attributed with interest equal to 10% of the capital balance as of the first day of the year  The remainder was to be assigned on a basis 5:2:3, respectively  Each partner was allowed to withdraw up to $13,000 per year Assume that the net loss for the first year of operations was $26,000 with net income of $52,000 in the second year. Assume further that each partner withdrew the maximum amount from the business each year. A. What was A's share of income or loss for the first year? B. What was B's share of income or loss for the first year? C. What was C's share of income or loss for the first year? D. What was the balance in…
A partnership began its first year of operations with the following capital balances: Young, Capital $ 143,000 Eaton, Capital $ 104,000 Thurman, Capital $ 143,000 The Articles of Partnership stipulated that profits and losses be assigned in the following manner: Young was to be awarded an annual salary of $26,000 and $13,000 salary was to be awarded to Thurman. Each partner was to be attributed with interest equal to 10% of the capital balance as of the first day of the year. The remainder was to be assigned on a 5:2:3 basis to Young, Eaton, and Thurman, respectively. Each partner withdrew $13,000 per year. Assume that the net loss for the first year of operations was $ 26,000 with net income of $52,000 in the second year. What was Thurman's total share of net income for the second year? Multiple Choice $17,160 income. $4, 160 income. $19,760 income. $ 17,290 income. $28,080 income.
A partnership began its first year of operations with the following capital balances: Young, Capital $ 143,000 Eaton, Capital $ 104,000 Thurman, Capital $ 143,000 The Articles of Partnership stipulated that profits and losses be assigned in the following manner: Young was to be awarded an annual salary of $26,000 and $13,000 salary was to be awarded to Thurman. Each partner was to be attributed with interest equal to 10% of the capital balance as of the first day of the year. • The remainder was to be assigned on a 5:2:3 basis to Young, Eaton, and Thurman, respectively. • Each partner withdrew $13,000 per year. Assume that the net loss for the first year of operations was $26,000 with net income of $52,000 in the second year. What was the balance in Young's Capital account at the end of the first year? ● ● Multiple Choice O $120,900 $118,300
A partnership began its first year of operations with the following capital balances: Young, Capital $ 143,000 Eaton, Capital $ 104,000 Thurman, Capital $ 143,000 The Articles of Partnership stipulated that profits and losses be assigned in the following manner: Young was to be awarded an annual salary of $26,000 and $13,000 salary was to be awarded to Thurman. Each partner was to be attributed with interest equal to 10% of the capital balance as of the first day of the year. The remainder was to be assigned on a 5:2:3 basis to Young, Eaton, and Thurman, respectively. Each partner withdrew $13,000 per year. Assume that the net loss for the first year of operations was $26,000 with net income of $52,000 in the second year. What was the balance in Thurman's Capital account at the end of the first year?
A partnership begins its first year of operations with the following capital balances: Winston, Capital . . . . . . . . . . $110,000Durham, Capital . . . . . . . . . . . 80,000Salem, Capital . . . . . . . . . . . . 110,000 According to the articles of partnership, all profits will be assigned as follows:∙ Winston will be awarded an annual salary of $20,000 with $10,000 assigned to Salem.∙ The partners will be attributed interest equal to 10 percent of the capital balance as of the first day of the year.∙ The remainder will be assigned on a 5:2:3 basis, respectively.∙ Each partner is allowed to withdraw up to $10,000 per year.The net loss for the first year of operations is $20,000 and net income for the subsequent year is $40,000. Each partner withdraws the maximum amount from the business each period. What is the balance in Winston’s capital account at the end of the second year? Choose the correct.a. $102,600b. $104,400c. $108,600d. $109,200
A partnership begins its first year with the following capital balances: Alfred, Capital . . . . . . . . . . . . .$ 50,000Bernard, Capital . . . . . . . . . . . . 60,000Collins, Capital . . . . . . . . . . . . . 70,000 The articles of partnership stipulate that profits and losses be assigned in the following manner:∙ Each partner is allocated interest equal to 5 percent of the beginning capital balance.∙ Bernard is allocated compensation of $18,000 per year.∙ Any remaining profits and losses are allocated on a 3:3:4 basis, respectively.∙ Each partner is allowed to withdraw up to $5,000 cash per year.Assuming that the net income is $60,000 and that each partner withdraws the maximum amount allowed, what is the balance in Collins capital account at the end of that year? Choose the correct.a. $70,800b. $86,700c. $73,500d. $81,700
Jasmine Partnership began its first year of operations with the following capital balances: J, Capital: $143,000 A, Capital: $104,000 S, Capital: $143,000 The Articles of Partnership stipulated that profits and losses be assigned in the following manner: - J was to be awarded an annual salary of $26,000 with $13,000 salary assigned to C - Each partner was to be attributed with interest equal to 10% of the capital balance as of the first day of the year - The remainder was to be assigned on a 4:3:3 basis, respectively. - Each partner was allowed to withdraw up to $13,000 per year. If the net loss for the first year of operations was $36,000 with net income of $42,000 in the second year. Assume also that each partner withdrew the maximum amount from the business each year. a. How much was the share of income or loss for the first year of S? b. How much was the balance in the capital account at the end of the second year of S?
A partnership begins its first year of operations with the following capital balances: Winston, Capital $ 52,000 Durham, Capital Salem, Capital 42,000 52,000 According to the articles of partnership, all profits will be assigned as follows: • Winston will be awarded an annual salary of $12,000 with $6,000 assigned to Salem. ⚫ The partners will be attributed interest equal to 10 percent of the capital balance as of the first day of the year. The remainder will be assigned on a 5:2:3 basis, respectively. • Each partner is allowed to withdraw up to $5,000 per year. The net loss for the first year of operations is $20,000 and net income for the subsequent year is $25,000. Each partner withdraws the maximum amount from the business each period. What is the balance in Winston's capital account at the end of the second year?
4. Roberts and Smith drafted a partnership agreement that lists the following assets contributed at the partnership's formation: Contributed by Roberts Smith $20,000 $30,000 15,000 40,000 Cash Inventory Building Furniture & Equipment 15,000 The building is subject to a mortgage of $10,000, which the partnership has assumed. The partnership agreement also specifies that profits and losses are to be distributed evenly. What amounts should be recorded as capital for Roberts and Smith at the formation of the partnership? Roberts Smith $35,000 $85,000 $35,000 $75,000 $55,000 $55,000 $60,000 $60,000 а. b. с. d.
A partnership begins its first year of operations with the following capital balances: Allegan, Capital $60,000 Berrien, Capital 50,000 Kent, Capital 60,000 According to the articles of partnership, all profits will be assigned as follows: • Allegan will be awarded an annual salary of $20,000 with $10,000 assigned to Kent. ⚫ The partners will be attributed interest equal to 10 percent of the capital balance as of the first day of the year. ⚫ The remainder will be assigned on a 5:2:3 basis, respectively. • Each partner is allowed to withdraw up to $8,000 per year. The net loss for the first year of operations is $24,000, and net income for the subsequent year is $29,000. Each partner withdraws the maximum amount from the business each period. Required: Prepare schedules that compute the balances in each partner's capital account at the end of each of the first two years of partnership operations.
A partnership begins its first year with the following capital balances: Alexander, Capital $38,000 Bertrand, Capital Coloma, Capital 48,000 58,000 The articles of partnership stipulate that profits and losses be assigned in the following manner: Each partner is allocated interest equal to 10 percent of the beginning capital balance. • Bertrand is allocated compensation of $18,000 per year. Any remaining profits and losses are allocated on a 3:3:4 basis, respectively. • Each partner is allowed to withdraw up to $3,000 cash per year. Assuming that the net income is $48,000 and that each partner withdraws the maximum amount allowed, what is the balance in Coloma's capital account at the end of the year? Multiple Choice $62,360 $70,040 $63,800 $67,040