1. Tam and Bal, Consultants, share the net income of their partnership in the following manner: Salaries are $50 000 each. • Interest on beginning capital is 8 percent. Tam's capital is $100 000 and Bal's capital is $80 000. The remaining net income or net loss after salaries and interest on capital are paid is shared 65:35. a. Prepare a Statement of Distribution of Net Income for Year 3. In Year 3 there was a profit of $200,000. Year 3 Net Income to be Divided b. Show the journal entry to distribute salaries for the month of December. Date Particulars P.R. Debit Credit c. Show the journal entry to distribute profit at the end of Year 3. Date Particulars P.R. Debit Credit
1. Tam and Bal, Consultants, share the net income of their partnership in the following manner: Salaries are $50 000 each. • Interest on beginning capital is 8 percent. Tam's capital is $100 000 and Bal's capital is $80 000. The remaining net income or net loss after salaries and interest on capital are paid is shared 65:35. a. Prepare a Statement of Distribution of Net Income for Year 3. In Year 3 there was a profit of $200,000. Year 3 Net Income to be Divided b. Show the journal entry to distribute salaries for the month of December. Date Particulars P.R. Debit Credit c. Show the journal entry to distribute profit at the end of Year 3. Date Particulars P.R. Debit Credit
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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This is for homework. Can you please help with a, b, and c. they are included in both photos
Transcribed Image Text:1. Tam and Bal, Consultants, share the net income of their partnership in the following manner:
Salaries are $50 000 each.
Interest on beginning capital is 8 percent. Tam's capital is $100 000 and Bal's capital is
$80 000.
The remaining net income or net loss after salaries and interest on capital are paid is
shared 65:35.
a. Prepare a Statement of Distribution of Net Income for Year 3. In Year 3 there was a profit of
$200,000.
Year 3
Net Income to be Divided
b. Show the journal entry to distribute salaries for the month of December.
Date
Particulars
P.R.
Debit
Credit
c. Show the journal entry to distribute profit at the end of Year 3.
Date
Particulars
P.R.
Debit
Credit
Transcribed Image Text:d. Prepare a Statement of Distribution of Net Income
for Year 4. In Year 4 there was a profit of
$180,000. (Hint: interest is based on beginning
capital each year)
Year 4
Net Income to be Divided
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