winston, CapitalDurham, CapitalSalem, Capital$58,00048,00058,000According to the articles of partnership, all profits will be assigned as follows:Winston will be awarded an annual salary of $18,000 with $9,000 assigned to Salem.The partners will be attributed interest equal to 10 percent of the capital balance as of the first day of the year.The remainder will be assigned on a 5:2:3 basis, respectively.· Each partner is allowed to withdraw up to $10,000 per year.The net loss for the first year of operations is $22,000 and net income for the subsequent year is $28,000. Each partnerwithdraws the maximum amount from the business each period. What is the balance in Winston's capital account at the endof the second year?Multiple Choice$39,100O $51,010$45,910$55,910

Partnership: This is the form of business entity that is created by an agreement, owned and managed…

capita $58,00 um, Capital , capital 48,000 58,000 ng to the articles of partnership, all profits will be assigned as follows: on will be awarded an annual salary of $18,000 with $9,000 assigned to Sale artners will be attributed interest equal to 10 percent of the capital balance as

capita $58,00 um, Capital , capital 48,000 58,000 ng to the articles of partnership, all profits will be assigned as follows: on will be awarded an annual salary of $18,000 with $9,000 assigned to Sale artners will be attributed interest equal to 10 percent of the capital balance as

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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A-1
Hh1. Account
The partnership of Hendrick, Mitchum, and Redding has the following account balances: Cash Noncash assets a Maximum amount b Distributed $ 51,000 136,000 This partnership is being liquidated. Hendrick and Mitchum are each entitled to 30 percent of all profits and losses with the remaining 40 percent going to Redding. Hendrick Mitchum Liabilities Hendrick, capital Mitchum, capital Redding, capital a. What is the maximum amount that Redding might have to contribute to this partnership because of the deficit capital balance? b. How should the $10,000 cash that is presently available in excess of liabilities be distributed? c. If the noncash assets are sold for a total of $51,000, what is the minimum amount of cash that Hendrick could receive? (Do not round intermediate calculations.) Redding C Minimum amount $ 41,000 91,000 71,000 (16,000)
Exercise 3-8. Distribution of Net Income to partners On March 1, 2023 Glenda and Harry formed GH Partnership with initial investment of P800,000 and P1,200,000, respectively. Glenda is appointed as the managing partner. The articles of co-partnership provides that profit or loss shall be distributed accordingly: 10% interest on original capital contribution ratio. Monthly salary of P10,000 and P5,000 respectively for Glenda and Harry. . Glenda shall be entitled to bonus equivalent to 10% of net income after interest, and salary. The remainder shall be distributed in ratio of 4:6 for Glenda and Harry, respectively. ● For the year ended December 31, 2023, the partnership reported net income of P1,000,000. Required: Compute for the share in net income of Glenda for the year ended December 31, 2023.
Douglas pays Selena $45,700 for her 25% interest in a partnership with net assets of $127,900. Following this transaction, Douglas's capital account should have a credit balance of a. $45,700 b. $127,900 c. $11,425 d. $31,975
A partnership began its first year of operations with the following capital balances: Young, Capital $ 143,000 Eaton, Capital $ 104,000 Thurman, Capital $ 143,000 The Articles of Partnership stipulated that profits and losses be assigned in the following manner: Young was to be awarded an annual salary of $26,000 and $13,000 salary was to be awarded to Thurman. Each partner was to be attributed with interest equal to 10% of the capital balance as of the first day of the year. • The remainder was to be assigned on a 5:2:3 basis to Young, Eaton, and Thurman, respectively. • Each partner withdrew $13,000 per year. Assume that the net loss for the first year of operations was $26,000 with net income of $52,000 in the second year. What was the balance in Young's Capital account at the end of the first year? ● ● Multiple Choice O $120,900 $118,300