Christie and Jergens formed a partnership with capital contributions of $350,000 and $450,000, respectively. Their partnership agreement calls for Christie to receive a $65,000 per year salary allowance. Also, each partner is to receive an interest allowance equal to 8% of the partner's beginning capital investments. The remaining income or loss is to be divided equally. If the net income for the current year is S144,000, then Christie and Jergens's respective shares of income are: Multiple Choice S43.000, $101,000. thing $72,000: S72.000 s100.500: $43,500. S93,000 S36.000. 563.000, S81,000

Christie and Jergens formed a partnership with capital contributions of $350,000 and $450,000, respectively. Their partnership agreement calls for Christie to receive a $65,000 per year salary allowance. Also, each partner is to receive an interest allowance equal to 8% of the partner's beginning capital investments. The remaining income or loss is to be divided equally. If the net income for the current year is S144,000, then Christie and Jergens's respective shares of income are: Multiple Choice S43.000, $101,000. thing $72,000: S72.000 s100.500: $43,500. S93,000 S36.000. 563.000, S81,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Farmer and Taylor formed a partnership with capital contributions of $245,000 and $295,000, respectively. Their partnership agreement calls for Farmer to receive a $79,000 per year salary allowance. The remaining income or loss is to be divided equally. Assuming net income for the current year is $189,000, the journal entry to allocate net income is: dit Fo Debit Income Summary, $189,000; Credit Farmer, Capital, $94,500; Credit Taylor, Capital, $94,500. Debit Income Summary, $189,000; Credit Farmer, Capital, $166,000; Credit Taylor, Capital, $23,000. Debit Income Summary, $189,000; Credit Farmer, Capital, $48,840; Credit Taylor, Capital, $140,160. Debit Income Summary, $189,000; Credit Farmer, Capital, $134,000; Credit Taylor, Capital, $55,000. Debit Income Summary, $189,000; Credit Taylor, Capital, $134,000; Credit Farmer, Capital, $55,000.
Ehrlich (beginning capital, $110,000) and Haar (beginning capital $85,000) are partners. During 2022 the partnership earned net income of $60,000. Ehrlich made drawings of $25,000 while Haar made drawings of $10,000. Instructions Assume the partnership income-sharing agreement calls for income to be divided with a salary of $22,000 to Ehrlich and $25,000 to Haar, interest of 10% on beginning capital, and the remainder divided 70%-30%. Prepare a schedule of the income allocation to each partner. Prepare the journal entry to record the allocation of net income. Compute Ehrlich's ending capital balance
At the beginning of the current year, Cameron and Harold formed the CH Partnership by transferring cash and property to the partnership in exchange for a partnership interest, with each having a 50% interest. Specifically, Cameron transferred property having a $55,000 FMV, a $28,000 adjusted basis, and subject to a $13,000 liability, which the partnership assumed. Harold contributed $60,000 cash to the partnership. The partnership also borrowed $26,000 from the bank to use in its operations. All liabilities are recourse for which the partners have an equal economic risk of loss. During the current year, the partnership earned $27,000 of net ordinary income and reinvested this amount in new property. Read the requirements. Requirement a. What is the partnership's and each partner's gain or loss recognized on the formation of the partnership? (Complete all input fields. Enter a loss with a minus sign or parentheses. If no gain or loss is recognized by a partner or the partnership, enter…
Coburn (beginning capital, $60,000) and Webb (beginning capital $90,000) are partners. During 2020, the partnership earned net income of $80,000, and Coburn made drawings of $18,000 while Webb made drawings of $24,000. (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 income) What are the account titles and explanations? What is debit? What is credit?
On February 1, 2020, Tessa Williams and Audrey Xie formed a partnership in Ontario. Williams contributed $89,000 cash and Xie contributed land valued at $129,000 and a small building valued at $189,000. Also, the partnership assumed responsibility for Xie’s $139,000 long-term note payable associated with the land and building. The partners agreed to share profit or loss as follows: Williams is to receive an annual salary allowance of $99,000, both are to receive an annual interest allowance of 12% of their original capital investments, and any remaining profit or loss is to be shared equally. On November 20, 2020, Williams withdrew cash of $69,000 and Xie withdrew $54,000. After the adjusting entries and the closing entries to the revenue and expense accounts, the Income Summary account had a credit balance of $169,000.Required:1. Present general journal entries to record the initial capital investments of the partners, their cash withdrawals, and the December 31 closing of the Income…
A and B formed a Partnership on January 1, 2020. Partner A’s contributed capital amounted to P40,000, while partner B’s contributed capital amounted to P20,000. The Partnership agreement provides for the following: Capital accounts are to be credited annually with interest at 5% of the beginning capital. Partner B is to be paid salary of P6,000 quarterly. Partner B is to receive a bonus of 10% based on the net income The Partnership's income statement for the year ended is as follows: Revenues, P105,000Expenses (including salary, interest, and bonus), 30,000Net income, 75,000 What is partner's B 2020 bonus? Group of answer choices 9,273 7,500 9,333 11,333
Xavier, Young, and Zane operate a partnership with a complex profit and loss sharing agreement. The average capital balance for each partner on December 31, 2021 is P300,000 for Xavier, P250,000 for Young, and P325,000 for Zane. An 8% interest allocation is provided to each partner based on the average capital balance on December 31, 2021. Xavier and Young receive salary allocations of P10,000 and P15,000, respectively. If partnership net income is above P25,000, after the salary allocations are considered (but before the interest allocations are considered), Zane will receive a bonus of 10% of the original amount of net income. All residual income is allocated in the ratios of 23.5 to Xavier, Young, and Zane, respectively. If the the partnership net income for 2021 is P250,000, the total share of Xavier, Young and Zane, respectively are:
heng invested $108,000 and Murray invested $208,000 in a partnership. They agreed to share incomes and losses by allowing a $62,000 per year salary allowance to Zheng and a $42,000 per year salary allowance to Murray, plus an interest allowance on the partners' beginning-year capital investments at 10%, with the balance to be shared equally. Assuming net income for the current year is $109,000, the journal entry to allocate net income is: Debit Income Summary, $109,000; Credit Zheng, Capital, $54,500, Credit Murray, Capital, $54,500. Debit Income Summary, $109,000; Credit Zheng, Capital, $36,600, Credit Murray, Capital, $72,400. Debit Zheng, Capital, $59,500, Debit Murray, Capital, $49,500; Credit Income Summary, $109,000; Debit Income Summary, $109,000; Credit Zheng, Capital, $59,500, Credit Murray, Capital, $49,500. Debit Income Summary, $109,000; Credit Zheng, Capital, $42,900, Credit Murray, Capital, $66,100.
Coburn (beginning capital, $56,000) and Webb (beginning capital $92,000) are partners. During 2022, the partnership earned net income of $69,000, and Coburn made drawings of $17,000 while Webb made drawings of $26,000. Assume the partnership income-sharing agreement calls for income to be divided with a salary of $37,000 to Coburn and $32,000 to Webb, interest of 12% on beginning capital, and the remainder divided 50%–50%. Prepare the journal entry to record the allocation of net income.
Jen, Raks, and Fred are partners with average capital balances during 20x9 of P945,000, P477,300, and P324,700, respectively. The partners receive 10% interest on their average capital balances; after deducting salaries of P244, 650 to Jen and P165,250 to Fred, the residual profits or loss is divided equally. In 2019, the partnership had a net loss of P251,248 before the interest and salaries to partners. By what amount should Jen's and Fred's capital account change increase (decrease)? Change in the Capital of Jen should be answered first, followed by the change in Fred's Capital
Reed and Sioux established a partnership and divided their profits as follows: Emerson will receive an annual salary allowance of $41,200 and a 10% interest rate on each partner's capital as of January 1. Equal distribution of any residual net profits. The capital balances at January 1 for Reed and Sioux were $34,000 and $146,000, respectively. $232,800 was the net profit for the year. What portion of the net income should be given to Dakota? [Fill in the blank] 1