b. Interest is 10 percent of weighted-average capital balances. Salaries are $24,000 to Eastwood, $21,000 to North, and $25,000 to West. North receives a bonus of 10 percent of net income after deducting the bonus and her salary. Any remainder is divided equally. Net income was $68,080. c. West receives a bonus of 20 percent of net income after deducting the bonus and the salaries. Salaries are $21,000 to Eastwood, $18,000 to North, and $15,000 to West. Interest is 10 percent of beginning capital balances. Eastwood, North, and West divide any remainder in an 8:7:5 ratio, respectively. Net income was $92,940.
b. Interest is 10 percent of weighted-average capital balances. Salaries are $24,000 to Eastwood, $21,000 to North, and $25,000 to West. North receives a bonus of 10 percent of net income after deducting the bonus and her salary. Any remainder is divided equally. Net income was $68,080. c. West receives a bonus of 20 percent of net income after deducting the bonus and the salaries. Salaries are $21,000 to Eastwood, $18,000 to North, and $15,000 to West. Interest is 10 percent of beginning capital balances. Eastwood, North, and West divide any remainder in an 8:7:5 ratio, respectively. Net income was $92,940.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
8
Transcribed Image Text:Eastwood, A. North, and M. West are manufacturers' representatives in the
architecture business. Their capital accounts in the ENW partnership for 20X1 were
as follows: 9/1 C. Eastwood, Capital 8,000 1/1 5/1 30,000 6,000 3/1 A. North,
Capital 9,000 1/1 7/1 9/1 40,000 5,000 4,000 M. West, Capital 8/1 12,000 1/1
50,000 4/1 7,000 6/1 3,000 page 799
Required
For each of the following independent income-sharing agreements, prepare an
income distribution schedule.
a. Salaries are $15,000 to Eastwood, $20,000 to North, and $18,000 to West.
Eastwood receives a bonus of 5 percent of net income after deducting his bonus.
Interest is 10 percent of ending capital balances. Eastwood, North, and West divide
any remainder in a 3:3:4 ratio, respectively. Net income was $78,960.
b. Interest is 10 percent of weighted-average capital balances. Salaries are $24,000
to Eastwood, $21,000 to North, and $25,000 to West. North receives a bonus of 10
percent of net income after deducting the bonus and her salary. Any remainder is
divided equally. Net income was $68,080.
c. West receives a bonus of 20 percent of net income after deducting the bonus
and the salaries. Salaries are $21,000 to Eastwood, $18,000 to North, and $15,000
to West. Interest is 10 percent of beginning capital balances. Eastwood, North, and
West divide any remainder in an 8:7:5 ratio, respectively. Net income was $92,940.
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