Dallas and Weiss formed a partnership to manage rental properties, by investing $164,000 and $246,000, respectively. During its first year, the partnership recorded profit of $514,000. Required: Prepare calculations showing how the profit should be allocated to the partners under each of the following plans for sharing profit and losses: a. The partners failed to agree on a method of sharing profit. b. The partners agreed to share profits and losses in proportion to their initial investments. c. The partners agreed to share profit by allowing a $156,000 per year salary allowance to Dallas, an $86,000 per year salary allowance to Weiss, 12% interest on their initial investments, and sharing the
Dallas and Weiss formed a partnership to manage rental properties, by investing $164,000 and $246,000, respectively. During its first year, the partnership recorded profit of $514,000. Required: Prepare calculations showing how the profit should be allocated to the partners under each of the following plans for sharing profit and losses: a. The partners failed to agree on a method of sharing profit. b. The partners agreed to share profits and losses in proportion to their initial investments. c. The partners agreed to share profit by allowing a $156,000 per year salary allowance to Dallas, an $86,000 per year salary allowance to Weiss, 12% interest on their initial investments, and sharing the
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Dallas and Weiss formed a partnership to manage rental properties, by investing $164,000 and $246,000, respectively. During its first year, the partnership recorded profit of $514,000.
Required:
Prepare calculations showing how the profit should be allocated to the partners under each of the following plans for sharing profit and losses:
a. The partners failed to agree on a method of sharing profit.
b. The partners agreed to share profits and losses in proportion to their initial investments.
c. The partners agreed to share profit by allowing a $156,000 per year salary allowance to Dallas, an $86,000 per year salary allowance to Weiss, 12% interest on their initial investments, and sharing the balance equally. (Leave no cell blank. Enter "0" when the answer is zero.)
Transcribed Image Text:Prepare caicuiations snowing now tne proTit snouia be aiocated tne partnersS under eacn or the foiOwing pians Tor s
and losses:
a. The partners failed to agree on a method of sharing profit.
Share to
Share to
Total
Dallas
Weiss
b. The partners agreed to share profits and losses in proportion to their initial investments.
Share to
Dallas
Share to
Total
Weiss
Transcribed Image Text:Help
Sav
c. The partners agreed to share profit by allowing a $156,000 per year salary allowance to Dallas, an $86,000 per year
allowance to Weiss, 12% interest on their initial investments, and sharing the balance equally. (Leave no cell blank. Ente-
answer is zero.)
Share to
Dallas
Share to
Total
Weiss
Total salaries and interest allocation
24
$
Balance of profit
2$
Balance allocated equally:
Balance of profit
Shares of each partner
2$
$4
2$
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