Keith Williams and Brian Adams were students when they formed a partnership several years ago for a part-time business called MusicWorks. Adjusted trial balance information for the year ended December 31, 2023, appears below.AccountAccountAccounts payableAccumulated depreciationBrian Adams, capital**Brian Adams, withdrawalsCashEquipmentExpensesBalance*$ 11,100Keith Williams, capital**Balance*$ 44,30091,000Keith Williams, withdrawals66,00038,000Note payable, due May 2025***152,00076,000227,200332,000Office suppliesRevenuesUtilities payable32,000512,0002,800118,000Assume all account balances are normal.The partners made no investments during the year.***$56,000 of the note payable is due in May 2024.Required:1. Prepare calculations that show how the profit should be allocated to the partners assuming the partnership agreement states thatprofit/(losses) are to be shared by allowing a $106,000 per year salary allowance to Williams, a $166,000 per year salary allowance toAdams, and the remainder on a 3:2 ratio. (Leave no cell blank. Enter "O" when the answer is zero.)ProfitSalary allowanceBalance of profit to be allocatedBalance allocated on a 3:2 ratioBalance of profitShares of the partnersWilliamsAdamsTotal0$00

Name: Keith Williams and Brian Adams were students when they formed a partn
Uploaded: 2024-03-05T11:50:36.000Z
Channel: Bartleby
Description: Keith Williams and Brian Adams were students when they formed a partnership several years ago for a part-time business called MusicWorks. Adjusted trial balance information for the year ended December 31, 2023, appears below.AccountAccountAccounts p

Partnership:A partnership is an agreement between two or more people to run a business and share its…

Business

Accounting

Account ccounts payable cumulated depreciation rian Adams, capital** rian Adams, withdrawals ash quipment xpenses Balance* $ 11,100 91,000 38,000 76,000 227,200 332,000 118,000 Account Keith Williams, capital** Keith Williams, withdrawals Note payable, due May 2025*** Office supplies Revenues Utilities payable Balance $ 44,300 66,000 152,000 32,000 512,000 2,800

Account ccounts payable cumulated depreciation rian Adams, capital** rian Adams, withdrawals ash quipment xpenses Balance* $ 11,100 91,000 38,000 76,000 227,200 332,000 118,000 Account Keith Williams, capital Keith Williams, withdrawals Note payable, due May 2025* Office supplies Revenues Utilities payable Balance $ 44,300 66,000 152,000 32,000 512,000 2,800

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Adax Designs Services is a partnership with Adam and Max as partners. The partnership has been operating successfully for a number of years now. The partners have a written partnership agreement. The following information was extracted from the accounting records of Adax. Design Services for the financial year ended 28 February 2021: Balances in the ledger as at 28 February 2021 R Land and buildings at costAccumulated depreciation: buildingsEquipment at carrying amountDebtorsCapital- AndileCapital- SiphoCurrent account- Andile Credit balance (1 March 2020)Current account –Sipho – Debit balance (1 March 2020Drawings – Andile: GeneralDrawings – Sipho: GeneralNet profit for the year ended 28 February 2021 835 000(65 000)270 000103 000400 000300 00040 00020 000130 000102 000800 000 The following must still be taken into account: 1. The partnership agreement makes provision for the following:• Interest on capital must be provided at 12% per year on the balances in the capital…
Adax Designs Services is a partnership with Adam and Max as partners. The partnership has been operating successfully for a number of years now. The partners have a written partnership agreement. The following information was extracted from the accounting records of Adax. Design Services for the financial year ended 28 February 2021: Balances in the ledger as at 28 February 2021 Land and buildings at cost 835 000 Accumulated depreciation: buildings (65 000) Equipment at carrying amount 270 000 Debtors 103 000 Capital- Andile 400 000 Capital- Sipho 300 000 Current account- Andile Credit balance (1 March 2020) 40 000 Current account -Sipho – Debit balance (1 March 2020 20 000 Drawings - Andile: General 130 000 Drawings – Sipho: General 102 000 Net profit for the year ended 28 February 2021 The following must still be taken.into. account: 800 000 1. The partnership agreement makes provision for the following: • Interest on capital must be provided at 12% per year on the balances in the…
Z admits A as a partner in business. Accounts in the ledger for Z on November 20, 2018, just before the admission of A, show the following balances: Cash P 6,800Accounts Receivable 14,200Merchandise Inventory 20,000Prepaid expense 1,000Accounts Payable 9,000Z, Capital 33,000 It is agreed that the purposes of establishing Z's interest the following adjustments shall be made:a) An allowance for doubtful accounts of 3% of accounts receivable is to be establishedb) The merchandise inventory is to be valued at P23,000.c) Prepaid salary expenses of P600 and accrued rent expense of P800 are to be recognized. A is to invest sufficient cash to obtain a 1/3 interest in the partnership.(1) Z's adjusted capital before…
The following information relates to partner for the year ended 29 February 2020: Current account credit balance on 29 February 2020 20 000 Profit share 50 000 Salaries 180 000 Interest on capital 24 000 Drawings 220 000 Interest on drawings 2 000 What is the balance in the Current account of the partner on 01 March 2019? OA. R12 000 DR. B. R116 00O DR OC. R52 000 CR D. R12 000 CR S Type here to search
The following are balances of a partnership between Shoe and Lace as at 2021 December 31: DR CR Capital on 2021 January 01: S S Shoe 30 000 Lace 30 000 Current Accounts on 2021 January 01: Shoe 1 500 Lace Drawings during the year were: Shoe Lace Land and building Equipment Cash at bank Bank loan 90 000 Electricity Office salaries Advertising Bad debts Provision for bad debts 700 Debtors Creditors 9 500 Provision for depreciation: Equipment 2 000 Stock on 2021 December 31 Gross profit for the year 150 000 Additional information: i. Provision for bad debts is to be increased by $50. ii. Amount for advertising included payment of $120 for 2022. iii. Electricity bill of $145 is due. iv. Equipment is to be depreciated at 20% per annum. v. Interest on capital is allowed at 20% per annum. vi. Interest on drawings is 5% per annum. vii. Profits and losses are to be shared between Shoe and Lace in the ratio 2:3. A. Prepare Profit and Loss and Appropriation Account for year ended 2021 December…
Z admits A as a partner in business. Accounts in the ledger for Z on November 20, 2018, just before the admission of A, show the following balances: Cash Accounts Receivable Merchandise Inventory Prepaid expense Accounts Payable Z, Capital P 6,800 14,200 20,000 1,000 9,000 33,000 It is agreed that the purposes of establishing Z's interest the following adjustments shall be made: a) An allowance for doubtful accounts of 3% of accounts receivable is to be established b) The merchandise inventory is to be valued at P23,000. c) Prepaid salary expenses of P600 and accrued rent expense of P800 are to be recognized. A is to invest sufficient cash to obtain a 1/3 interest in the partnership. (1) Z's adjusted capital before the admission of A; and (2) the amount cash investment by A:
Prepare the Statement of Changes in Equity of Camray Traders for the year ended 28 February 2021. The information given below was extracted from the accounting records of Camray Traders, a partnership business with Camy and Raymond as partners. The financial year ends on the last day of February each year. Balances in the ledger on 28 February 2021 Debit Credit R R Capital: Camy 1 200 000 Capital: Raymond 800 000 Current a/c: Camy (01 March 2020) 50 000 Current a/c: Raymond (01 March 2020) 60 000 Drawings: Camy 360 000 Drawings: Raymond 320 000 The following must be taken into account: (a) The net profit according to the statement of comprehensive income amounted to R1 400 000 on 28 February 2021. (b) The partnership agreement made provision for the following: ¦ Interest on capital must be provided at 18% per annum on the balances in the capital accounts. Note: Camy increased her capital by R240 000 on 01 September 2020. Raymond decreased his capital by R120 000 on the same date. The…
The information given below was extracted from the accounting records of Ndlove Traders, a partnership business with Brian and Taryn as partners. REQUIRED Use the information provided to prepare the Statement of Changes in Equity for the year ended 29 February 2020. INFORMATION Extract from the ledger of Britar Traders as at 29 February 2020 Debit Credit R R Capital: Brian 900 000 Capital: Taryn 600 000 Current a/c: Brian (01 March 2019) 50 000 Current a/c: Taryn (01 March 2019) 30 000 Drawings: Brian 350 000 Drawings: Taryn 250 000 The following must be taken into account: 1. On 29 February 2020 the Statement of Comprehensive Incomec reflected, amongst others, the following: Sales R1 200 000 Sales returns R50 000 Net profit R700 000 2. The partners earn interest at 12% p.a. on their capital balances. Note: Brian increased his capital…
The information given below was extracted from the accounting records of Britar Traders, a partnership business with Brian and Taryn as partners. REQUIRED Use the information provided to prepare the Statement of Changes in Equity for the year ended 29 February 2020. INFORMATION Extract from the ledger of Britar Traders as at 29 February 2020 Debit Credit R R Capital: Brian 900 000 Capital: Taryn 600 000 Current a/c: Brian (01 March 2019) 50 000 Current a/c: Taryn (01 March 2019) 30 000 Drawings: Brian 350 000 Drawings: Taryn 250 000 The following must be taken into account: 1. On 29 February 2020 the Statement of Comprehensive Incomec reflected, amongst others, the following: Sales R1 200 000 Sales returns R50 000 Net profit R700 000 2. The partners earn interest at 12% p.a. on their capital balances. Note: Brian increased his capital…
On March 1, 2020, EE and FF decided to combine their business and form a partnership. Their balance sheets onMarch 1 before adjustments showed the following: 1. Compute the net (debit)/credit adjustment for EE anf FF. EE FF EE FFA. 28,700 ; 28,200 C. (8,700) ; 1,800B. (28,700) ; (28,200) D. 8,700 ; (1,800) 2. Compute the total assets after the formation.A. 1,607,650 C. 1,579,850B. 1,570,850 D. 1,568,750 3. If the partners are to share profits and losses in the ratio of 6:4 and their capital is top reflect this relationship, what is the capital of FF after the formation?A. 400,000 C. 369,740B. 391,700 D. 391,700 4. If If the partners are to share profits and losses in the ratio of 6:4 and their capital is top reflect this relationship with EE’s capital to be used as a basis, what is the capital of FF after the formation?A. 400,000 C. 369,740B. 391,700 D. 391,700
The following information relates to partner for the year ended 29 February 2020: Current account credit balance on 29 February 2020 20 000 Profit share 50 000 Salaries 180 000 Interest on capital 24 000 Drawings 220 000 Interest on drawings 2 000 What is the balance in the Current account of the partner on 01 March 2019? A. R12 000 DR O B. R116 000 DR OC. R52 000 CR O D. R12 000 CR
siness Accounting Q&A Library On January 1, 2030, A, B and C formed ABC Partnership with original capital contribution of P600,000, P1,100,000 and P400,000. A is appointed as managing partner. During 2030, A, B and C made additional investments of P1,000,000, P400,000 and P600,000, respectively. At the end of 2030, A, B and C made drawings of P400,000, P200,000 and P800,000, respectively. At the end of 2030, the capital balance of C is reported at P640,000. The profit or loss agreement of the partners is provided below: • 10% interest on original capital contribution of the partners. • Quarterly salary of P80,000 and P20,000 for A and B, respectively. • Bonus to A equivalent to 20% of Net Income after interest and salary to all partners • Remainder is to be distributed equally among the partners 14. What is the capital balance of B on December 31, 2030? On January 1, 2030, A, B and C formed ABC Partnership with original capital contribution of P600,000, P1,100,000 and P400,000. A…