At September 30, 2021, C. Saber and J. Wong, the two partners of City Landscaping, had capital account balances of $25,000 each. D. Walker joined the partnership on September 30, 2021 and received a 1/3interest in the partnership in exchange for a capital contribution of $40,000.For the year ended September 30, 2022, City Landscaping had profit of $126,000, which is allocated equally to the three partners. Withdrawals during the year were $18,000 each by Saber and Wong, and$14,000 by Walker.Instructionsa) Record the transaction on September 30, 2021 admitting Walker into the partnership.b) Calculate the balance of each partner's capital account after the transaction.c) Prepare the statement of partners' equity for the year ended September 20, 2022.

Partnership is the relation between two or more person, It has the following characteristicsThey…

Answered: At September 30, 2021, C. Saber and J.…

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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Nancy and Peter enter into a partnership and decide to share profits and losses as follows: 1 The first allocation is a salary allowance with Nancy receiving $16,000 and Peter receiving $14,000. 2. The second allocation is 20% of the partners' capital balances at year end. On December 31, 2019, the capital balances for Nancy and Peter are $88,000 and $25,000, respectively 3. Any remaining profit or loss is allocated equally. For the year ending December 31, 2019, the partnership reported a net loss of $95,000. What is Peter's share of the net loss? OA. $40,200 OB. $7,300 OC. $21,200 OD. $19,000
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 res the allocation of net income. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit Income Summary 69000 Coburn, Capital 34840 34160 Webb, Capital Compute the partners' ending capital balances under the assumption in part (c) above. Ending capital Coburn Webb 34840
Sandhill Accountants is a partnership with three partners. On February 29, 2024, the three partners, M. Anderson, H. White, and A. Martin, have capital balances of $80,940, $68,520, and $40,800, respectively. The profit and loss ratio is 4: 3:1. On March 1, 2024, White withdraws from the partnership and the remaining partners agree to pay him $85,680 cash from the partnership assets. After White leaves, Anderson and Martin agree to a 4:2 profit ratio. During the year ended February 28, 2025, the partnership earns a profit of $22,860. Neither Anderson nor Martin makes any withdrawals because the partnership is short of cash after paying White. On March 1, 2025, Anderson and Martin agree to admit C. Clark to the partnership with a 45% interest for $71,400 cash. After Clark is admitted, the new profit and loss ratio will be 4:2:5 for Anderson, Martin, and Clark, respectively. Journalize the withdrawal of White from the partnership
Goodman, Pinkman, and White formed a partnership on January 1, 2020, and made capital contributions of $125,000 (Goodman), $175,000 (Pinkman), and $250,000 (White), respectively. With respect to the division of income, they agreed to the following: (1) interest of an amount equal to 10% of the that partner’s beginning capital balance for the year; (2) annual compensation of $15,000 to Pinkman; and (3) the remainder of the income or loss to be split among the partners in the following percentages: (a) 20% for Goodman; (b) 40% for Pinkman; 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 Goodman’s total share of net income for 2020?
Kimble, Sykes, and Gerard open an accounting practice on January 1, 2019, in Chicago, Illinois, to be operated as a partnership. Kimble and Sykes will serve as the senior partners because of their years of experience. To establish the business, Kimble, Sykes, and Gerard contribute cash and other properties valued at $328.000. $240.000, and $152.000, respectively. An articles of partnership agreement is drawn up stipulating the following: ⚫ Personal drawings are allowed annually up to an amount equal to 10 percent of the partner's beginning capital balance for the year. Profits and losses are allocated according to the following plan: 1. Each partner receives an annual salary allowance of $55 per billable hours worked. 2. Interest is credited to the partners' capital accounts at the rate of 12 percent of the beginning capital balance for the year. 3. Kimble and Sykes are eligible for an annual bonus of 10 percent of net income after subtracting the bonus, salary allowance, and interest.…
Kimble, Sykes, and Gerard open an accounting practice on January 1, 2022, in Chicago, Illinois, to be operated as a partnership. Kimble and Sykes will serve as the senior partners because of their years of experience. To establish the business, Kimble, Sykes, and Gerard contribute cash and other properties valued at $233,000, $192,500, and $104,500, respectively. An articles of partnership agreement is drawn up stipulating the following: • • Personal drawings are allowed annually up to an amount equal to 10 percent of the partner's beginning capital balance for the year. Profits and losses are allocated according to the following plan: 1. Each partner receives an annual salary allowance of $55 per billable hours worked. 2. Interest is credited to the partners' capital accounts at the rate of 12 percent of the beginning capital balance for the year. 3. Kimble and Sykes are eligible for an annual bonus of 10 percent of net income after subtracting the bonus, salary allowance, and…
Kimble, Sykes, and Gerard open an accounting practice on January 1, 2022, in Chicago, Illinois, to be operated as a partnership. Kimble and Sykes will serve as the senior partners because of their years of experience. To establish the business, Kimble, Sykes, and Gerard contribute cash and other properties valued at $248,000, $200,000, and $112,000, respectively. An articles of partnership agreement is drawn up stipulating the following: Personal drawings are allowed annually up to an amount equal to 10 percent of the partner's beginning capital balance for the year. Profits and losses are allocated according to the following plan: Each partner receives an annual salary allowance of $55 per billable hours worked. Interest is credited to the partners’ capital accounts at the rate of 12 percent of the beginning capital balance for the year. Kimble and Sykes are eligible for an annual bonus of 10 percent of net income after subtracting the bonus, salary allowance, and interest. The…
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.
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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.
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A Lululime fashion business partnership has agreed that half of the annual profit be distributed in proportion to each partner's investment in the partnership, and that the other half be distributed in proportion to the total number of hours that each partner worked in the business during the year. In 2020 the profit of the company was $82,780. How the company should allocated this profit to its three investors if the amounts invested by Howe, Denver, and Laura are $68,000, $27,000, and $43,000, and their hours of work for the year were 420, 1170, and 1230, respectively?

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