A, B and C were partners with capital balances on January 1, 2020 of 100,000, 150,000, and 200,000respectively. Their profit and loss ratio is 50%, 30% and 20%, respectively. On July 1, 2020, A retires fromthe partnership. On the date of retirement the partnership net income is 140,000 and the partners agreedthat inventories are to be revalued at 70,000 from its original cost of 50,000. The partnership agreed furtherto pay A, 195,000 in settlement of his interest. What are the capital balances of the remaining partners afterthe retirement of A using bonus method?

In this case capital on July 1 is:- Capital=opening capital+ Share in profit+ Share in FV changes

Answered: A, B and C were partners with capital…

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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Goodman, Pinkman, and White formed a partnership on January 1, 2020, and made capital commibutions of $125,000 (Goodman, $175,000 Pinkman and $250,000 (White), respectively. With respect to the division of income, they agreed to the following: interest of an amount equal to 10% of the that partner's beginning capital balance for the year. 12) annual compensation of $15,000 to Pinkman and (3) the remainder of the Income or loss to be spilt among the partners In the following percentages (8) 20% for Goodman: b) 40% for Pinkmen; and (c) 40% for White. Net Income was $200,000 in 2020 and $240,000 in 2021. Each partner withdrew $1,500 for personal use every month during 2020 and 2021 What was the remainder portion of net income allocated to White for 202 о O Choc 562360 $5,000 $90,000 574160
Ehrlich (beginning capital, $110,000) and Haar (beginning capital $85,000) are partners. During 2022 the partnership earned net income of $60,000. Ehrlich made drawings of $25,000 while Haar made drawings of $10,000. Instructions Assume the partnership income-sharing agreement calls for income to be divided with a salary of $22,000 to Ehrlich and $25,000 to Haar, interest of 10% on beginning capital, and the remainder divided 70%-30%. Prepare a schedule of the income allocation to each partner. Prepare the journal entry to record the allocation of net income. Compute Ehrlich's ending capital balance
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The partnership started its business on January 1, 2021,calendar year. Partner Beta had a beginning capital of P45,000 and made additional capital contributions during 2021 totaling P50,000. During the year 2021, Beta withdrew P3,000 per month. Beta's post-closing capital balance on December 31, 2021 is P80,000. Beta's share of 2021 partnership income is
Alaa, Sami and Ray, the partners in ASR Company, have capital balances on January 1, 2020 of s110,000, S77,000 and S33,000 respectively. The net income for the year is $25,000. The partnership income-sharing agreement indicates: 1. Annual salaries of S7,000 for Alaa, $5,500 for Sami, and $4,500 for Ray. 2. Interest of 7% on beginning capital balances for all partners. 3. Remaining income or loss to be shared based on the partner's beginning capital ratios
Net income for AB partnership for 2021 was $125,000. A and B have agreed to distribute partnership net income according to the following plan as shown in the image. Additional Information for 2021 follows:  A began the year with a capital balance of $75,000  B began the year with a capital balance of $100,000  On March 1, A invested an additional $25,000 into the partnership  On October 1, B invested an additional $20,000 into the partnership  Throughout 2021, each partner withdrew $200 per week in anticipation of partnership net income. The partners agreed that these withdrawals are not to be included in the computation of average capital balances for purposes of income distributions. A. Allocate the income to partners A and B B. Compute for the ending capital balances of the partners.
During 2020, ASHE and JINX maintained average capital balances of in their partnership of P200,000 and P150,000, respectively. Both partners receive 10% interest on average capital balances, and residual profit or loss is to be divided equally. Partnership profit before interest was P10,000. By what amount should JINX's capital account change for the year?
A and B formed a Partnership on January 1, 2020. Partner A’s contributed capital amounted to P40,000, while partner B’s contributed capital amounted to P20,000. The Partnership agreement provides for the following: Capital accounts are to be credited annually with interest at 5% of the beginning capital. Partner B is to be paid salary of P6,000 quarterly. Partner B is to receive a bonus of 10% based on the net income The Partnership's income statement for the year ended is as follows: Revenues, P105,000Expenses (including salary, interest, and bonus), 30,000Net income, 75,000 What is partner's B 2020 bonus? Group of answer choices 9,273 7,500 9,333 11,333
Coburn (beginning capital, $56,000) and Webb (beginning capital $92,000) are partners. During 2022, the partnership earned net income of $69,000, and Coburn made drawings of $17,000 while Webb made drawings of $26,000. Assume the partnership income-sharing agreement calls for income to be divided with a salary of $37,000 to Coburn and $32,000 to Webb, interest of 12% on beginning capital, and the remainder divided 50%–50%. Prepare the journal entry to record the allocation of net income.
Tom and Faith are in a partnership sharing profits and losses in the ratio of 3/5 for Tom and 2/5 for Faith. The partnership deed provides for interest on capital at the rate of 5% and interest on drawings at 10% per annum. The partners are entitled to annual salaries of $ 2,000 and $1,000 for Tom and Faith respectively. The following balances were extracted from the books of the partnership as at 30th, September 2020: $ Capital accounts: Tom 14,000 Faith 10,000 Current accounts: Tom 4,000 Faith 2,500 Drawings: Tom 3,800 Faith 2,200 During the year the partners had made a net profit of $15,000 for the business. Required: Prepare the partners’ current accounts as at 30th September 2020.

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