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, 2023, appears below. Account Accounts payable Accumulated depreciation Brian Adams, capital** Brian Adams, withdrawals Cash Equipment Expenses Balance $ 10,500 Account Balance* Keith Williams, capital** $ 38,300 85,000 Keith Williams, withdrawals 60,000 32,000 70,000 Note payable, due May 2025*** Office supplies 140,000 26,000 220,000 Revenues 500,000 320,000 Utilities payable 2,200 112,000 "Assume all account balances are normal. **The partners made no investments during the year. ***$50,000 of the note payable is due in May 2024. 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 $100,000 per year salary allowance to Williams, a $160,000 per year salary allowance to Adams, and the remainder on a 3:2 ratio. (Leave no cell blank. Enter "O" when the answer is zero.) Profit Salary allowance Balance of profit to be allocated Balance allocated on a 3:2 ratio Balance of profit Shares of the partners Williams Adams Total 0 $ 0 0
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, 2023, appears below. Account Accounts payable Accumulated depreciation Brian Adams, capital** Brian Adams, withdrawals Cash Equipment Expenses Balance $ 10,500 Account Balance* Keith Williams, capital** $ 38,300 85,000 Keith Williams, withdrawals 60,000 32,000 70,000 Note payable, due May 2025*** Office supplies 140,000 26,000 220,000 Revenues 500,000 320,000 Utilities payable 2,200 112,000 "Assume all account balances are normal. **The partners made no investments during the year. ***$50,000 of the note payable is due in May 2024. 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 $100,000 per year salary allowance to Williams, a $160,000 per year salary allowance to Adams, and the remainder on a 3:2 ratio. (Leave no cell blank. Enter "O" when the answer is zero.) Profit Salary allowance Balance of profit to be allocated Balance allocated on a 3:2 ratio Balance of profit Shares of the partners Williams Adams Total 0 $ 0 0
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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, 2023, appears below.
Account
Accounts payable
Accumulated depreciation
Brian Adams, capital**
Brian Adams, withdrawals
Cash
Equipment
Expenses
Balance
$ 10,500
Account
Balance*
Keith Williams, capital**
$ 38,300
85,000
Keith Williams, withdrawals
60,000
32,000
70,000
Note payable, due May 2025***
Office supplies
140,000
26,000
220,000
Revenues
500,000
320,000
Utilities payable
2,200
112,000
"Assume all account balances are normal.
**The partners made no investments during the year.
***$50,000 of the note payable is due in May 2024.
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 $100,000 per year salary allowance to Williams, a $160,000 per year salary allowance to
Adams, and the remainder on a 3:2 ratio. (Leave no cell blank. Enter "O" when the answer is zero.)
Profit
Salary allowance
Balance of profit to be allocated
Balance allocated on a 3:2 ratio
Balance of profit
Shares of the partners
Williams
Adams
Total
0
$
0
0
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