Determine the amount of net income that Steve and Heather would have received.
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Steve and Heather decided to form a
Determine the amount of net income that Steve and Heather would have received.
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- 5Carlo and Jamie are partners who agreed that monthly salaries will be allowed to them as follows: Carlo for P15,00 and Jamie for P20,000. 5% bonus is given to Jamie on net income after salaries and the remainder is distributed on the ratio of 40% to Carlo and 60% to Jamie. Assuming the partnership had net income after taxes for distribution at the end of the year amounting to P580,000. How much will be share of Jaime on the profit of the partnership business?On June 1, 2020, Jill Bow and Aisha Adams formed a partnership to open a gluten-free commercial bakery, contributing $298,000 cash and $396,000 of equipment, respectively. The partnership also assumed responsibility for a $58,000 note payable associated with the equipment. The partners agreed to share profits as follows: Bow is to receive an annual salary allowance of $168,000, both are to receive an annual interest allowance of 5% of their original capital investments, and any remaining profit or loss is to be shared 40/60 (to Bow and Adams, respectively). On November 20, 2020, Adams withdrew cash of $118,000. At year-end, May 31, 2021, the Income Summary account had a credit balance of $560,000. On June 1, 2021, Peter Williams invested $138,000 and was admitted to the partnership for a 20% interest in equity. Required: 1. Prepare journal entries for the following dates. a. June 1, 2020 b. November 20, 2020 c. May 31, 2021 d. June 1, 2021 2. Calculate the balance in each…
- Watts and Lyon are forming a partnership. Watts invests $24,500 and Lyon invests $45,500. The partners agree that Watts will work one-fourth of the total time devoted to the partnership and Lyon will work three-fourths. They have discussed the following alternative plans for sharing income and loss: (a) in the ratio of their initial capital investments; (b) in proportion to the time devoted to the business; (c) a salary allowance of $18,000 per year to Lyon and the remaining balance in accordance with the ratio of their initial capital investments; or (d) a salary allowance of $18,000 per year to Lyon, 9% interest on their initial capital investments, and the remaining balance shared equally. The partners expect the business to perform as follows: Year 1, $17,000 net loss; Year 2, $42,500 net income; and Year 3, $70,833 net income. Required: Complete the tables, one for each of the first three years, by showing how to allocate partnership income or loss to the partners under each of…A partnership begins its first year with the following capital balances: The articles of partnership stipulate that profits and losses be assigned in the following manner: Bernard is allocated compensation of $18,000 per year. Each partner is allowed to withdraw up to $5,000 cash per year. Any remaining profits and losses are allocated on a 3:3:4 basis, respectively. Each partner is allowed to withdraw up to $5,000 cash per year. Assuming that the net income is $60,000 and that each partner withdraws the maximum amount allowed, what is the balance in Collins capital account at the end of that year? $70,800 $86,700 $73,500 $81,700Watts and Lyon are forming a partnership. Watts invests $40,500 and Lyon invests $49,500. The partners agree that Watts will work one-fourth of the total time devoted to the partnership and Lyon will work three-fourths. They have discussed the following alternative plans for sharing income and loss: (a) in the ratio of their initial capital investments; (b) in proportion to the time devoted to the business; (c) a salary allowance of $15,000 per year to Lyon and the remaining balance in accordance with the ratio of their initial capital investments; or (d) a salary allowance of $15,000 per year to Lyon, 11% interest on their initial capital investments, and the remaining balance shared equally. The partners expect the business to perform as follows: Year 1, $13,000 net loss; Year 2, $32,500 net income; and Year 3, $54,167 net income. Required: Complete the tables, one for each of the first three years, by showing how to allocate partnership income or loss to the partners under each of…
- Lewis Wardell and Lewis Lomas own Lewis’ Antiques. Their partnership agreement provides for annual salary allowances of $200,000 for Wardell and $180,000 for Lomas, and interest of 10 percent on each partner’s invested capital at the beginning of the year. The remainder of the net income or loss is to be distributed 50 percent to Wardell and 50 percent to Lomas. The partners withdraw their salary allowances monthly. On January 1, 20X1, the capital account balances were Wardell, $600,000, and Lomas, $560,000. On December 15, 20X1, Lomas made a permanent withdrawal of $55,000. The net income for 20X1 was $640,000. Required: Prepare the general journal entry on December 15, 20X1, to record the permanent withdrawal by Lomas. Prepare the general journal entries on December 31, 20X1, to: Record the salary allowances for the year. Record the interest allowances for the year. Record the division of the balance of net income. Close the drawing accounts into the…6) Oliva Tsang and David Breck began a partnership by investing $5,000 and $45,000 respectively. For the year-ended December 31, 2009, the partnership earned $100,000. The partners agree to share income by allowing a $65,000 per year salary allowance to Breck, a $15,000 per year salary allowance to Tsang, 5% interest on beginning capital balances and the remainder equally. a) Prepare calculations that show how the income should be allocated to the partners under the following plans for sharing net incomes and losses.A Lululime fashion business partnership has agreed that half of the annual profit be distributed in proportion to each partner's investment in the partnership, and that the other half be distributed in proportion to the total number of hours that each partner worked in the business during the year. In 2020 the profit of the company was $82,780. How the company should allocated this profit to its three investors if the amounts invested by Howe, Denver, and Laura are $68,000, $27,000, and $43,000, and their hours of work for the year were 420, 1170, and 1230, respectively?
- 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.Ahmed and Salim form a partnership on June 1. Ahmed contributes OMR 15,000 cash, inventory with a market value of OMR 40,000 , and Accounts Payable of OMR 80,000. Ahmed also contributed computer equipment with a cost of OMR 80,000 and accumulated depreciation of OMR 20,000 . Current market value is OMR 85,000 Ahmed's Capital will be Select one: O a. Credit, 30,000 O b. Credit, 60,000 O c. Debit, 30,000 O d. Debit, 60,0009. JJ&T Partnership has three partners, James Small, Josh Platt, and Turner Lyle, who allocate net income according to the services provided and any remainder equally. The partnership agreement states that James and Turner will provide services for $2,500 a month while Josh will provide services for $3,750. For the fiscal year ending December 31, 2015, the partnership earned $192,600. Determine the amount allocated to each partner and prepare the journal entry to record the division of net income.
