(c) Coburn (beginning capital, Tk. 60,000) and Webb (beginning capital Tk. 90,000) are partners. During 2017, the partnership eamed net income of Tk. 80,000, and Coburn made drawings of Tk. 18,000 while Webb made drawings of Tk. 24,000. Instructions (i) Assume the partnership income-sharing agreement calls for income to be divided 45% to Coburn and 55% to Webb. Prepare the journal entry to record the allocation of net ineome. (ii) Assume the partnership income-sharing agreement calls for income to be divided with a salary of Tk. 30,000 to Cobum and Tk. 25,000 to Webb, with the remainder divided 45% to Coburn and 55% to Webb. Prepare the journal entry to record the allocation of net income. (iii) Assume the partnership income-sharing agreement calls for income to be divided with a salary of Tk. 40,000 to Cobum and Tk. 35,000 to Webb, interest of 10% on beginning capital, and the remainder divided 50%-50%. Prepare the journal entry to record the allocation of net income. (iv) Compute the partners' ending capital balances under the assumption in part (c).
(c) Coburn (beginning capital, Tk. 60,000) and Webb (beginning capital Tk. 90,000) are partners. During 2017, the partnership eamed net income of Tk. 80,000, and Coburn made drawings of Tk. 18,000 while Webb made drawings of Tk. 24,000. Instructions (i) Assume the partnership income-sharing agreement calls for income to be divided 45% to Coburn and 55% to Webb. Prepare the journal entry to record the allocation of net ineome. (ii) Assume the partnership income-sharing agreement calls for income to be divided with a salary of Tk. 30,000 to Cobum and Tk. 25,000 to Webb, with the remainder divided 45% to Coburn and 55% to Webb. Prepare the journal entry to record the allocation of net income. (iii) Assume the partnership income-sharing agreement calls for income to be divided with a salary of Tk. 40,000 to Cobum and Tk. 35,000 to Webb, interest of 10% on beginning capital, and the remainder divided 50%-50%. Prepare the journal entry to record the allocation of net income. (iv) Compute the partners' ending capital balances under the assumption in part (c).
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
Partnership Accounting
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings, admission of a new partner, etc.
Partner Admission and Withdrawal
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings of a partner, etc.
Question
Transcribed Image Text:(c) Coburn (beginning capital, Tk. 60,000) and Webb (beginning capital Tk. 90,000) are
partners. During 2017, the partnership eamed net income of Tk. 80,000, and Coburn made
drawings of Tk. 18,000 while Webb made drawings of Tk. 24,000.
Instructions
(i) Assume the partnership income-sharing agreement calls for income to be divided 45% to
Coburn and 55% to Webb. Prepare the journal entry to record the allocation of net ineome.
(ii) Assume the partnership income-sharing agreement calls for income to be divided with a
salary of Tk. 30,000 to Cobum and Tk. 25,000 to Webb, with the remainder divided 45% to
Coburn and 55% to Webb. Prepare the journal entry to record the allocation of net income.
(iii) Assume the partnership income-sharing agreement calls for income to be divided with a
salary of Tk. 40,000 to Cobum and Tk. 35,000 to Webb, interest of 10% on beginning capital,
and the remainder divided 50%-50%. Prepare the journal entry to record the allocation of net
income.
(iv) Compute the partners' ending capital balances under the assumption in part (c).
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