Based on information in photo: Prepare a schedule showing the division of net income under assumption (3) above Prepare a partner's capital statement for the year under assumption (3) above

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question

Based on information in photo:

Prepare a schedule showing the division of net income under assumption (3) above

Prepare a partner's capital statement for the year under assumption (3) above

At the end of its first year of operations on December 31, 2022. Crane Company's accounts show the following.
Partner
Drawings
Capital
Art Niensted
$18,860
$39,360
Greg Bolen
11,228
24,600
Krista Sayler
8,200
20,500
The capital balance represents each partner's initial capital investment. Therefore, net income or net loss for 2022 has not been
closed to the partners' capital accounts.
Your answer is correct.
Journalize the entry to record the division of net income for the year 2022 under each of the following independent assumptions.
(Credit account titles are automatically indented when amount is entered. Do not indent manualy.)
1
Net income is $24,600. Income is shared 6:3:1.
Net income is $32,800. Niensted and Bolen are given salary allowances of $12.300 and $8.200. respectively. The
remainder is shared equally.
2.
Net income is $15,580. Each partner is allowed interest of 10% on beginning capital balances. Niensted is given a
$12,300 salary allowance. The remainder is shared equally.
3.
No. Account Titles and Explanation
Debit
Credit
1.
Income Summary
24600
A. Niensted, Capital
14760
G. Bolen, Capital
7380
K. Sayler, Capital
2460
2.
Income Summary
32800
A. Niensted, Capital
16400
G.Bolen, Capital
12300
K. Sayler, Capital
4100
3.
Income Summary
15580
A. Niensted, Capital
14514
G.Bolen, Capital
736
K. Sayler, Capital
326
Transcribed Image Text:At the end of its first year of operations on December 31, 2022. Crane Company's accounts show the following. Partner Drawings Capital Art Niensted $18,860 $39,360 Greg Bolen 11,228 24,600 Krista Sayler 8,200 20,500 The capital balance represents each partner's initial capital investment. Therefore, net income or net loss for 2022 has not been closed to the partners' capital accounts. Your answer is correct. Journalize the entry to record the division of net income for the year 2022 under each of the following independent assumptions. (Credit account titles are automatically indented when amount is entered. Do not indent manualy.) 1 Net income is $24,600. Income is shared 6:3:1. Net income is $32,800. Niensted and Bolen are given salary allowances of $12.300 and $8.200. respectively. The remainder is shared equally. 2. Net income is $15,580. Each partner is allowed interest of 10% on beginning capital balances. Niensted is given a $12,300 salary allowance. The remainder is shared equally. 3. No. Account Titles and Explanation Debit Credit 1. Income Summary 24600 A. Niensted, Capital 14760 G. Bolen, Capital 7380 K. Sayler, Capital 2460 2. Income Summary 32800 A. Niensted, Capital 16400 G.Bolen, Capital 12300 K. Sayler, Capital 4100 3. Income Summary 15580 A. Niensted, Capital 14514 G.Bolen, Capital 736 K. Sayler, Capital 326
Expert Solution
Step 1

A partnership seems to be a category of business in which 2 or more individuals split ownership and are also responsible for the firm's management and the profits or losses it creates. That money is distributed to individuals, who would then claim it on their income tax returns — the firm is not taxed independently on its earnings or losses, as corporations would.

trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps

Blurred answer
Knowledge Booster
Partners and Partnerships
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education