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Keith Williams and Brian Adams were students when they formed a partnership several years ago for a part-time business called Mus Works. Adjusted trial balance information for the year ended December 31, 2020, appears below. Account Accounts payable Accumulated depreciation Brian Adams, capital Brian Adams, withdrawals Cash Equipment Expenses Balance $ 11,500 95,000 42,000 80,000 232,000 340,000 122,000 Account Keith Willians, capital** Keith Williams, withdrawals Note payable, due May 2022*** office supplies Revenues Utilities payable *Assume all account balances are normal. "The partners made no investments during the year. ***$60,000 of the note payable is due in May 2021. Balance $ 45,300 70,000 160,000 36,000 520,000 3,200 Required: 1. Prepare calculations that show how the profit should be allocated to the partners assuming the partnership agreement states that profit/(losses) are to be shared by allowing a $110,000 per year salary allowance to Williams, a $170,000 per year salary allowance to Adams, and the remainder on a 3.2 ratio. (Leave no cell blank. Enter "0" when the answer is zero.)

Keith Williams and Brian Adams were students when they formed a partnership several years ago for a part-time business called Mus Works. Adjusted trial balance information for the year ended December 31, 2020, appears below. Account Accounts payable Accumulated depreciation Brian Adams, capital Brian Adams, withdrawals Cash Equipment Expenses Balance $ 11,500 95,000 42,000 80,000 232,000 340,000 122,000 Account Keith Willians, capital** Keith Williams, withdrawals Note payable, due May 2022*** office supplies Revenues Utilities payable *Assume all account balances are normal. "The partners made no investments during the year. ***$60,000 of the note payable is due in May 2021. Balance $ 45,300 70,000 160,000 36,000 520,000 3,200 Required: 1. Prepare calculations that show how the profit should be allocated to the partners assuming the partnership agreement states that profit/(losses) are to be shared by allowing a $110,000 per year salary allowance to Williams, a $170,000 per year salary allowance to Adams, and the remainder on a 3.2 ratio. (Leave no cell blank. Enter "0" when the answer is zero.)

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Keith Williams and Brian Adams were students when they formed a partnership several years ago for a part-time business called Music Works. Adjusted trial balance Information for the year ended December 31, 2020, appears below. Account Accounts payable Accumulated depreciation. Brian Adams, capitales Brian Adams, withdrawals Cash Equipment Expenses Balance Account $ 11,500 Keith Willians, capital** 95,000 Keith Williams, withdrawals 42,000 Note payable, due May 2022*** 80,000 office supplies Revenues Utilities payable 232,000 340,000 122,000 *Assume all account balances are normal. "The partners made no investments during the year. ***$60,000 of the note payable is due in May 2021. Profit Salary alowance Balance of profit to be allocated Balance allocated on a 32 ratio Balance of profit Shares of the partners Required: 1. Prepare calculations that show how the profit should be allocated to the partners assuming the partnership agreement states that profit/(losses) are to be shared by allowing a $110,000 per year salary allowance to Williams, a $170,000 per year salary allowance to Adams, and the remainder on a 3:2 ratio. (Leave no cell blank. Enter "0" when the answer is zero.) Williams Adams Balance $ 48,300 70,000 160,000 36,000 520,000 3,200 Total
Transcribed Image Text:Keith Williams and Brian Adams were students when they formed a partnership several years ago for a part-time business called Music Works. Adjusted trial balance Information for the year ended December 31, 2020, appears below. Account Accounts payable Accumulated depreciation. Brian Adams, capitales Brian Adams, withdrawals Cash Equipment Expenses Balance Account $ 11,500 Keith Willians, capital** 95,000 Keith Williams, withdrawals 42,000 Note payable, due May 2022*** 80,000 office supplies Revenues Utilities payable 232,000 340,000 122,000 *Assume all account balances are normal. "The partners made no investments during the year. ***$60,000 of the note payable is due in May 2021. Profit Salary alowance Balance of profit to be allocated Balance allocated on a 32 ratio Balance of profit Shares of the partners Required: 1. Prepare calculations that show how the profit should be allocated to the partners assuming the partnership agreement states that profit/(losses) are to be shared by allowing a $110,000 per year salary allowance to Williams, a $170,000 per year salary allowance to Adams, and the remainder on a 3:2 ratio. (Leave no cell blank. Enter "0" when the answer is zero.) Williams Adams Balance $ 48,300 70,000 160,000 36,000 520,000 3,200 Total
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