After closing the revenue and expense accounts, the profit for the year ended December 31, 2024, of Sharon & Laura Partnership is $90,900. The partnership agreement specifies that profits and losses will be shared using the following formula. 1. Allocate salary allowances of $26,700 to Sharon and $37,500 to Laura. Remaining profit (loss) is to be shared on a ratio of 2:1. 2. At the beginning of the year, Sharon's capital account had a balance of $32,000 and Laura's capital account had a balance of $23,500. Sharon withdrew $1,068 cash per month while Laura withdrew $2,136 per month from the partnership. Prepare a schedule to show how the profit will be allocated to the two partners. (Round answers to O decimal places, e.g. 5,275.)

After closing the revenue and expense accounts, the profit for the year ended December 31, 2024, of Sharon & Laura Partnership is $90,900. The partnership agreement specifies that profits and losses will be shared using the following formula. 1. Allocate salary allowances of $26,700 to Sharon and $37,500 to Laura. Remaining profit (loss) is to be shared on a ratio of 2:1. 2. At the beginning of the year, Sharon's capital account had a balance of $32,000 and Laura's capital account had a balance of $23,500. Sharon withdrew $1,068 cash per month while Laura withdrew $2,136 per month from the partnership. Prepare a schedule to show how the profit will be allocated to the two partners. (Round answers to O decimal places, e.g. 5,275.)

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

The balance in Xue's capital account includes an additional investment of $10,000 made on May 5, 20Y2. Instructions: 1. Prepare an income statement for 20Y2, indicating the division of net income. The partnership agreement provides for salary allowances of $38,000 to Ramirez and $46,000 to Xue, allowances of 10% on each partner's capital balance at the beginning of the fiscal year, and equal division of the remaining net income or a net loss. 2. prepare a statement of partnership equity for 20Y2. 3. Prepare a balance sheet as of the end of 20Y2.
Ries, Bax, and Thomas invested $40,000, $56,000, and $64,000, respectively, in a partnership. During its first calendar year, the firm earned $418, 200. Required: Prepare the entry to close the firm's Income Summary account as of its December 31 year-end and to allocate the $418, 200 net income under each of the following separate assumptions. 2. The partners agreed to share income and loss in the ratio of their beginning capital investments.
Farmer and Taylor formed a partnership with capital contributions of $245,000 and $295,000, respectively. Their partnership agreement calls for Farmer to receive a $79,000 per year salary allowance. The remaining income or loss is to be divided equally. Assuming net income for the current year is $189,000, the journal entry to allocate net income is: dit Fo Debit Income Summary, $189,000; Credit Farmer, Capital, $94,500; Credit Taylor, Capital, $94,500. Debit Income Summary, $189,000; Credit Farmer, Capital, $166,000; Credit Taylor, Capital, $23,000. Debit Income Summary, $189,000; Credit Farmer, Capital, $48,840; Credit Taylor, Capital, $140,160. Debit Income Summary, $189,000; Credit Farmer, Capital, $134,000; Credit Taylor, Capital, $55,000. Debit Income Summary, $189,000; Credit Taylor, Capital, $134,000; Credit Farmer, Capital, $55,000.
The partnership agreement of the G&P general partnership states that Gary will receive a guaranteed payment of $14,500, and that Gary and Prudence will share the remaining profits or losses in a 45/55 ratio. For year 1, the G&P partnership reports the following results: Sales revenue Gain on sale of land ($1231) Cost of goods sold Depreciation-MACRS Employee wages Cash charitable contributions Municipal bond interest Other expenses (Negative amounts should be indicated by a minus sign.) Problem 20-61 Part a (Algo) a-1. How much ordinary income (loss) is allocated to Gary for the year? a-2. Compute Gary's share of separately stated items to be reported on his year 1 Schedule K-1, including his self-employment income (loss). Req A1 Complete this question by entering your answers in the tabs below. Req A2 $ 80,700 6,900 (28,200) (18,100) (17,200) (4,600) Description Separately Stated Items on Schedule K-1: §1231 gains Cash charitable contributions Compute Gary's share of separately stated…
Ruby, Sapphire, and Emerald have been partners throughout 2021. Their average balances and their balances at the end of the year before closing the nominal accounts are as follows: Average Balances Ruby - P48,750 Sapphire - 3,650 Emerald 2,125 Balances 12/31/2021 Ruby - 35,000 Sapphire - 5,900 Emerald - 850(debit balance) The income for 2021 is P51,750 before charging partners' salary allowances and before payment of Interest on average balances at the agreed rate of 4% per annum. Annual salary allocations are P6,250 to Ruby, P4,375 to Sapphire, and P3,125 to Emerald. The balance of the profits is to be allocated at the rate of 60% to Ruby, 10% to Sapphire, and 30% to Emerald. It is intended to distribute cash to the partners so that, after credits and allocations have been made as indicated in the preceding paragraph, the balances in the partners' accounts will be proportionate to their residual profit- sharing ratios. None of the partners is to invest additional cash, but they wish…
The partnership agreement of Jones, King, and Lane provides for the annual allocation of the business's profit or loss in the following sequence: • Jones, the managing partner, receives a bonus equal to 15 percent of the business's profit. • Each partner receives 10 percent interest on average capital investment. Any residual profit or loss is divided equally. The average capital investments for 2021 were as follows: Jones King Lane The partnership earned $84,000 net income for 2021. Prepare a schedule showing how the 2021 net income should be allocated to the partners. (Loss amounts should be indicated with a minus sign.) Net income Bonus Interest $ 190,000 380,000 570,000 Remainder to allocate Total allocation Jones King Lane Total
Lewis Wardell and Lewis Lomas own Lewis’ Antiques. Their partnership agreement provides for annual salary allowances of $200,000 for Wardell and $180,000 for Lomas, and interest of 10 percent on each partner’s invested capital at the beginning of the year. The remainder of the net income or loss is to be distributed 50 percent to Wardell and 50 percent to Lomas. The partners withdraw their salary allowances monthly. On January 1, 20X1, the capital account balances were Wardell, $600,000, and Lomas, $560,000. On December 15, 20X1, Lomas made a permanent withdrawal of $55,000. The net income for 20X1 was $640,000. Required: Prepare the general journal entry on December 15, 20X1, to record the permanent withdrawal by Lomas. Prepare the general journal entries on December 31, 20X1, to: Record the salary allowances for the year. Record the interest allowances for the year. Record the division of the balance of net income. Close the drawing accounts into the…
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
The ledger of Tyler Lambert and Jayla Yost, attorneys-at-law, contains the following accounts and balances after adjustments have been recorded on December 31, 20Y3: Lambert and Yost Trial Balance December 31, 20Y3 Debit Balances Credit Balances Cash 34,000 Accounts Receivable 47,800 Supplies 2,000 Land 120,000 Building Accumulated Depreciation-Building Office Equipment Accumulated Depreciation-Office Equipment Accounts Payable Salaries Payable Tyler Lambert, Capital Tyler Lambert, Drawing Jayla Yost, Capital Jayla Yost, Drawing 157,500 67,200 63,600 21,700 27,900 5,100 135,000 50,000 88,000 60,000 Professional Fees 395,300 Salary Expense Depreciation Expense-Building 154,500 15,700 Property Tax Expense 12,000 Heating and Lighting Expense Supplies Expense Depreciation Expense-Office Equipment Miscellaneous Expense 8,500 6,000 5,000 3,600 740,200 740,200 The balance in Yost's capital account includes an additional investment of $10,000 made on April 10, 2OY3. (Continued)
On February 1, 2020, Tessa Williams and Audrey Xie formed a partnership in Ontario. Williams contributed $89,000 cash and Xie contributed land valued at $129,000 and a small building valued at $189,000. Also, the partnership assumed responsibility for Xie’s $139,000 long-term note payable associated with the land and building. The partners agreed to share profit or loss as follows: Williams is to receive an annual salary allowance of $99,000, both are to receive an annual interest allowance of 12% of their original capital investments, and any remaining profit or loss is to be shared equally. On November 20, 2020, Williams withdrew cash of $69,000 and Xie withdrew $54,000. After the adjusting entries and the closing entries to the revenue and expense accounts, the Income Summary account had a credit balance of $169,000.Required:1. Present general journal entries to record the initial capital investments of the partners, their cash withdrawals, and the December 31 closing of the Income…
9. JJ&T Partnership has three partners, James Small, Josh Platt, and Turner Lyle, who allocate net income according to the services provided and any remainder equally. The partnership agreement states that James and Turner will provide services for $2,500 a month while Josh will provide services for $3,750. For the fiscal year ending December 31, 2015, the partnership earned $192,600. Determine the amount allocated to each partner and prepare the journal entry to record the division of net income.
Reed and Sioux established a partnership and divided their profits as follows: Emerson will receive an annual salary allowance of $41,200 and a 10% interest rate on each partner's capital as of January 1. Equal distribution of any residual net profits. The capital balances at January 1 for Reed and Sioux were $34,000 and $146,000, respectively. $232,800 was the net profit for the year. What portion of the net income should be given to Dakota? [Fill in the blank] 1