Current Attempt in Progress McGill and Smyth have capital balances on January 1 of $41,000 and $34,000, respectively. The partnership income-sharing agreement provides for (1) annual salaries of $25,000 for McGill and $17,000 for Smyth, (2) interest at 12% on beginning capital balances, and (3) remaining income or loss to be shared 60% by McGill and 40% by Smyth. (a) (1) Prepare a schedule showing the distribution of net income, assuming net income is $85,000. (If an amount duces the account balance then enter with a negative sign preceding the number or parenthesis, e.g.-15,000, (15,000).) Salary allowance Interest allowance. $ DIVISION OF NET INCOME McGill 25000 4920 $ Smyth 17000 4080 Total 42000

Current Attempt in Progress McGill and Smyth have capital balances on January 1 of $41,000 and $34,000, respectively. The partnership income-sharing agreement provides for (1) annual salaries of $25,000 for McGill and $17,000 for Smyth, (2) interest at 12% on beginning capital balances, and (3) remaining income or loss to be shared 60% by McGill and 40% by Smyth. (a) (1) Prepare a schedule showing the distribution of net income, assuming net income is $85,000. (If an amount duces the account balance then enter with a negative sign preceding the number or parenthesis, e.g.-15,000, (15,000).) Salary allowance Interest allowance. $ DIVISION OF NET INCOME McGill 25000 4920 $ Smyth 17000 4080 Total 42000

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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Question

Current Attempt in Progress
McGill and Smyth have capital balances on January 1 of $41,000 and $34,000, respectively. The partnership income-sharing
agreement provides for (1) annual salaries of $25,000 for McGill and $17,000 for Smyth, (2) interest at 12% on beginning capital
balances, and (3) remaining income or loss to be shared 60% by McGill and 40% by Smyth.
(a)
(1)
Prepare a schedule showing the distribution of net income, assuming net income is $85,000. (If an amount reduces the account
balance then enter with a negative sign preceding the number or parenthesis, e.g. -15,000, (15,000).)
Salary allowance
Interest allowance
$
DIVISION OF NET INCOME
McGill
55
25000
4920
$
Smyth
17000
4080
$
Total
42000
9000

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