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C. 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 8,800 1/1 5/1 30,700 6,700

C. 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 8,800 1/1 5/1 30,700 6,700

FINANCIAL ACCOUNTING
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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C. 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 3/1 8/1 C. Eastwood, Capital 8,800 Show Transcribed Text 1/1 5/1 A. North, Capital 10,600 1/1 7/1 9/1 M. West, Capital 12,200 1/1 4/1 6/1 Required: For each of the following independent income-sharing agreements, prepare an income distribution schedule. Profit ratio Average capital Net income Interest on average capital balance Salary Bonus Residual income (deficit) Allocate Total Eastwood b. Interest is 10 percent of weighted-average capital balances. Salaries are $24,900 to Eastwood, $21,500 to North, and $26,000 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 $69,350. (Do not round intermediate calculations. Round the final answers to nearest whole dollar. Amounts that are to be deducted from an individual partner's capital balance should be entered with a minus sign.) $ 30 30,700 6,700 24,900 41,300 6,300 4,600 0 51,200 7,600 4,400 24,900 $ North 30 21,500 21,500 $ West 40 26,000 0 $ $ 26,000 $ Total 100 69,350 0 (72,400) 0 (3,050) 0 (3,050)
Transcribed Image Text:C. 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 3/1 8/1 C. Eastwood, Capital 8,800 Show Transcribed Text 1/1 5/1 A. North, Capital 10,600 1/1 7/1 9/1 M. West, Capital 12,200 1/1 4/1 6/1 Required: For each of the following independent income-sharing agreements, prepare an income distribution schedule. Profit ratio Average capital Net income Interest on average capital balance Salary Bonus Residual income (deficit) Allocate Total Eastwood b. Interest is 10 percent of weighted-average capital balances. Salaries are $24,900 to Eastwood, $21,500 to North, and $26,000 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 $69,350. (Do not round intermediate calculations. Round the final answers to nearest whole dollar. Amounts that are to be deducted from an individual partner's capital balance should be entered with a minus sign.) $ 30 30,700 6,700 24,900 41,300 6,300 4,600 0 51,200 7,600 4,400 24,900 $ North 30 21,500 21,500 $ West 40 26,000 0 $ $ 26,000 $ Total 100 69,350 0 (72,400) 0 (3,050) 0 (3,050)
c. West receives a bonus of 20 percent of net income after deducting the bonus and the salaries. Salaries are $22,100 to Eastwood, $18,700 to North, and $15,600 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 $95,520. (Do not round intermediate calculations. Amounts that are to be deducted from an individual partner's capital balance should be entered with a minus sign.) Profit ratio Beginning capital Net income Bonus Salary Interest on beginning capital balance Residual income (deficit) Allocate Total Eastwood $ 80 0 $ 22,100 $ 22,100 $ North 70 0 18,700 18,700 $ West 50 15,600 $ $ EA 15,600 $ Total 200 95,520 0 (56,400) 0 39,120 0 39,120
Transcribed Image Text:c. West receives a bonus of 20 percent of net income after deducting the bonus and the salaries. Salaries are $22,100 to Eastwood, $18,700 to North, and $15,600 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 $95,520. (Do not round intermediate calculations. Amounts that are to be deducted from an individual partner's capital balance should be entered with a minus sign.) Profit ratio Beginning capital Net income Bonus Salary Interest on beginning capital balance Residual income (deficit) Allocate Total Eastwood $ 80 0 $ 22,100 $ 22,100 $ North 70 0 18,700 18,700 $ West 50 15,600 $ $ EA 15,600 $ Total 200 95,520 0 (56,400) 0 39,120 0 39,120
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