I did parts 1,2(on the excel it is shown as a b c ) already, and have attached them.. i need help with 3 and 4.. lemon and salt entered into a partnership to provide supply chain management and logistic services in the san francisco region of California. In their agreed Articles of Partnership, the partners acknowledged the following: Sharing of profits and losses: Compensate each partner $125 per hour for their billable hourly consulting work performed. lemon receives an additional $3,000 monthly as the partnership’s Chief Operating Officer (COO); salt receives an additional $2,500 monthly as the partnership’s Chief Technology Officer (CTO), Any remaining profits or losses are divided equally between the partners. Each partner is permitted but not required to withdraw no more than $800 per month from the partnership and such withdrawals will be accounted for as direct reductions of the withdrawing partner’s capital balance They will begin their partnership with equal beginning capital balances. On January 1, 20x1, when they formed the partnership, each partners’ contributions were as follows: lemon invested cash of $50,000. salt invested $140,000 in cash and she invested office equipment with a book value of $10,000 and fair value of $25,000. In recognition of lemon’s expertise in supply chain management and distribution logistics, the partners have agreed to begin their partnership with equal capital balances, as noted in the partnership agreement above. For fiscal year-ending 20x1, the total partnership's net income was $410,000. Additionally, in 20x1, lemon worked 1,100 billable partnership hours, and salt worked 1,500 billable hours. Lastly, each partner withdrew their allotted $800 per month throughout 20x1. Required For fiscal year-ending 20x1, prepare a schedule showing the allocation of 20x1 profit and losses, withdrawals, and other related activity to each partner’s capital account. For fiscal year-ending 20x1, prepare a schedule showing the balance in each partner’s capital account at the end fiscal year 20x1. Assume that on 1/1/20x2, Jess Day invests $100,000 in exchange for a 20% interest in the partnership. lemon and salt’s partnership sharing ratios then are 40% each. Using the bonus method, prepare a journal entry admitting Day into the partnership. Any bonus is allocated based on the partnership profit and loss sharing ratio. Prepare a schedule showing the balance of each partners’ capital account, after admitting Jess Day.

I did parts 1,2(on the excel it is shown as a b c ) already, and have attached them.. i need help with 3 and 4.. lemon and salt entered into a partnership to provide supply chain management and logistic services in the san francisco region of California. In their agreed Articles of Partnership, the partners acknowledged the following: Sharing of profits and losses: Compensate each partner $125 per hour for their billable hourly consulting work performed. lemon receives an additional $3,000 monthly as the partnership’s Chief Operating Officer (COO); salt receives an additional $2,500 monthly as the partnership’s Chief Technology Officer (CTO), Any remaining profits or losses are divided equally between the partners. Each partner is permitted but not required to withdraw no more than $800 per month from the partnership and such withdrawals will be accounted for as direct reductions of the withdrawing partner’s capital balance They will begin their partnership with equal beginning capital balances. On January 1, 20x1, when they formed the partnership, each partners’ contributions were as follows: lemon invested cash of $50,000. salt invested $140,000 in cash and she invested office equipment with a book value of $10,000 and fair value of $25,000. In recognition of lemon’s expertise in supply chain management and distribution logistics, the partners have agreed to begin their partnership with equal capital balances, as noted in the partnership agreement above. For fiscal year-ending 20x1, the total partnership's net income was $410,000. Additionally, in 20x1, lemon worked 1,100 billable partnership hours, and salt worked 1,500 billable hours. Lastly, each partner withdrew their allotted $800 per month throughout 20x1. Required For fiscal year-ending 20x1, prepare a schedule showing the allocation of 20x1 profit and losses, withdrawals, and other related activity to each partner’s capital account. For fiscal year-ending 20x1, prepare a schedule showing the balance in each partner’s capital account at the end fiscal year 20x1. Assume that on 1/1/20x2, Jess Day invests $100,000 in exchange for a 20% interest in the partnership. lemon and salt’s partnership sharing ratios then are 40% each. Using the bonus method, prepare a journal entry admitting Day into the partnership. Any bonus is allocated based on the partnership profit and loss sharing ratio. Prepare a schedule showing the balance of each partners’ capital account, after admitting Jess Day.

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ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter14: Distributions To Shareholders: Dividends And Repurchases

Section: Chapter Questions

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I did parts 1,2(on the excel it is shown as a b c ) already, and have attached them.. i need help with 3 and 4..

lemon and salt entered into a partnership to provide supply chain management and logistic services in the san francisco region of California.

In their agreed Articles of Partnership, the partners acknowledged the following:

Sharing of profits and losses:

Compensate each partner $125 per hour for their billable hourly consulting work performed.
lemon receives an additional $3,000 monthly as the partnership’s Chief Operating Officer (COO);
salt receives an additional $2,500 monthly as the partnership’s Chief Technology Officer (CTO),
Any remaining profits or losses are divided equally between the partners.

Each partner is permitted but not required to withdraw no more than $800 per month from the partnership and such withdrawals will be accounted for as direct reductions of the withdrawing partner’s capital balance
They will begin their partnership with equal beginning capital balances.

On January 1, 20x1, when they formed the partnership, each partners’ contributions were as follows:

lemon invested cash of $50,000.
salt invested $140,000 in cash and she invested office equipment with a book value of $10,000 and fair value of $25,000.
In recognition of lemon’s expertise in supply chain management and distribution logistics, the partners have agreed to begin their partnership with equal capital balances, as noted in the partnership agreement above.

For fiscal year-ending 20x1, the total partnership's net income was $410,000.

Additionally, in 20x1, lemon worked 1,100 billable partnership hours, and salt worked 1,500 billable hours.

Lastly, each partner withdrew their allotted $800 per month throughout 20x1.

Required

For fiscal year-ending 20x1, prepare a schedule showing the allocation of 20x1 profit and losses, withdrawals, and other related activity to each partner’s capital account.
For fiscal year-ending 20x1, prepare a schedule showing the balance in each partner’s capital account at the end fiscal year 20x1.
Assume that on 1/1/20x2, Jess Day invests $100,000 in exchange for a 20% interest in the partnership. lemon and salt’s partnership sharing ratios then are 40% each.
- Using the bonus method, prepare a journal entry admitting Day into the partnership. Any bonus is allocated based on the partnership profit and loss sharing ratio.
Prepare a schedule showing the balance of each partners’ capital account, after admitting Jess Day.

A
Cash
$190,000
Office Equip
$25,000
lemon Capital
$107,500
salt Capital
$107,500
B
total net income
$410,000
compensation -S
$137,500
compensation - D
$187,500
Additional Salary-S
$36,000
Additional Salary-D
$30,000
Net Profit Distributed
$19,000
Profit Ratio / each
$9,500
Total Shares- lemon
$147,000
total Shares- salt
$197,000
C
lemon
salt
capital contributed
$107,500
$107,500
compensation
$137,500
$187,500
additional salary
$36,000
$30,000
share in profit
$9,500
$9,500
capital acc total
$290,500
$334,500

Definition Definition Arrangement between two or more people whereby they agree to manage business operations and share its profits and losses in an agreed ratio. The agreement drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, and drawings of a partner.

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