E Left:0.25"E Before 0 pt. dnoA RotatePosition WraPBringText Forward Backward-SendSelection* Right 0"= After0 ptPaneParagraphArrange1. For Starrite Co., beginning capital balances on January 1, 2012, are Dona Noble$18,000 and Amy Bond $16,000. During the year, drawings were Noble $7,000 andBond $4,000. Net income was $20,000, and the partners share income equally.InstructionsPrepare the partners capital statement for the year.2. The net income for Lodi Co. for 2012 was $270,000. For 2012, depreciation on plantassets was $50,000, and the company incurred a gain on sale of plant assets of $12,000.Compute net cash provided by operating activities under the indirect method.3. Kimmel Corporation purchased debt investments for $50.000 on January 1, 2012. OnJuly 1, 2012, Kiimmel recetved cash interest of S2,500. Journalize the purchase and thereceipt of interest. Assume that no interest has been accrued.

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1. For Starrite Co., beginning capital balances on January 1, 2012, are Donna Noble $18,000 and Amy Bond $16,000. During the year, drawings were Noble $7,000 and Bond $4,000. Net income was $20,000, and the partners share income equally.

1. For Starrite Co., beginning capital balances on January 1, 2012, are Donna Noble $18,000 and Amy Bond $16,000. During the year, drawings were Noble $7,000 and Bond $4,000. Net income was $20,000, and the partners share income equally.

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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6) Oliva Tsang and David Breck began a partnership by investing $5,000 and $45,000 respectively. For the year-ended December 31, 2009, the partnership earned $100,000. The partners agree to share income by allowing a $65,000 per year salary allowance to Breck, a $15,000 per year salary allowance to Tsang, 5% interest on beginning capital balances and the remainder equally. a) Prepare calculations that show how the income should be allocated to the partners under the following plans for sharing net incomes and losses.
heng invested $108,000 and Murray invested $208,000 in a partnership. They agreed to share incomes and losses by allowing a $62,000 per year salary allowance to Zheng and a $42,000 per year salary allowance to Murray, plus an interest allowance on the partners' beginning-year capital investments at 10%, with the balance to be shared equally. Assuming net income for the current year is $109,000, the journal entry to allocate net income is: Debit Income Summary, $109,000; Credit Zheng, Capital, $54,500, Credit Murray, Capital, $54,500. Debit Income Summary, $109,000; Credit Zheng, Capital, $36,600, Credit Murray, Capital, $72,400. Debit Zheng, Capital, $59,500, Debit Murray, Capital, $49,500; Credit Income Summary, $109,000; Debit Income Summary, $109,000; Credit Zheng, Capital, $59,500, Credit Murray, Capital, $49,500. Debit Income Summary, $109,000; Credit Zheng, Capital, $42,900, Credit Murray, Capital, $66,100.
P1, P2, and P3 are partners in XYZ Inc. Their capital balances on Dec 31, Year 5, are $202,119 for P1, $280,737 for P2, and $148,780 for P3. Among these partners on this date, the income sharing ratios are 35.17% for P1, 43.18% for P2, and the remainder for P3. On Jan 1, Year 6, a new partner P4 invests $118,838 in XYZ Inc for a one-eighth (12.5%) interest in capital. In the journal entry to admit the new partner P4, how much capital will be credited or debited to P2 on Jan 1 using the ASSET REVALUATION method? a. $77,813 b. $84,298 c. $86,459 d. $82,136 e. $79,975
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The following are the condensed balance sheets of G&N Partnership at August 30, 2016, at which date Ellery is to be admitted with a 30% interest in capital for an investment of 55,000. Book Value Cash $ 20,000 Other assets 503,000 Total assets $ 523,000 Current liabilities 54,000 Non current liabilities 269,000 Gemmo, capital 120,000 Norma, capital 80,000 Total equities $ 523,000 Fair Value Cash $ 20,000 Other assets 417,000 Total assets 437,000 Current liabilities S 54,000 Non current liabilities 275,000 Gemmo and Norma share profits at 60% and 40%, respectively. Required: Choose the correct answer with solution. 1. What will be the respective capital balances of Gemmo, Norma, and Ellery after the new partner's admission. a. $68,460, $45,640, $48,900 b. $48,900, $45,640, $68,460 c. S45,640, $68,460, S48,900 d. $64,860, $49,240, $48,900
At the end of its first year of operations on December 31, 2010, KAT Company’s accountsshow the following.Partner Drawings CapitalH. Krik $15,000 $40,000N. Andres 10,000 25,000S.Thabo 5,000 15,000The capital balance represents each partner’s initial capital investment. Therefore, net incomeor net loss for 2010 has not been closed to the partners’ capital accounts.Required(A)Journalize the entry to record the division of net income for 2010 under each of theindependent assumptions:(1) Net income is $50,000. Income is shared 5:3:2.(2) Net income is $40,000. Kirk and Andres are given salary allowances of $15,000 and$10,000, respectively. The remainder is shared equally.(3) Net income is $37,000. Each partner is allowed an interest of 10% on beginning capitalbalances. Kirk is given a $20,000 salary allowance. The remainder is shared equally.(B) Prepare a schedule showing the division of net income under the assumption (3) above.(C) Prepare a partners’ capital statement for the year under…