Lopez and Gomez are members in an LLC that reports net income of $139,000. An agreement states that Lopez receives a $20,900 salary allowance and Gomez receives a $50,900 salary allowance. Any remaining income or loss is to be shared by Lopez and Gomez in a 2:3 ratio (in percents: Lopez, 40%; Gomez, 60%). 1. Determine each member's share of net income. 2. Prepare the entry to record the closing of Income Summary. Hint: The business is a limited liability company (LLC), so equity accounts are "Lopez, Member Equity" and "Gomez, Member Equity". Complete this question by entering your answers in the tabs below. Required 1 Required 2 Determine each member's share of net income. Allocation of each member's Income Lopez Gomez Net income Salary allowances Balance of income Balance allocated Balance of income Shares of the members Total

Lopez and Gomez are members in an LLC that reports net income of $139,000. An agreement states that Lopez receives a $20,900 salary allowance and Gomez receives a $50,900 salary allowance. Any remaining income or loss is to be shared by Lopez and Gomez in a 2:3 ratio (in percents: Lopez, 40%; Gomez, 60%). 1. Determine each member's share of net income. 2. Prepare the entry to record the closing of Income Summary. Hint: The business is a limited liability company (LLC), so equity accounts are "Lopez, Member Equity" and "Gomez, Member Equity". Complete this question by entering your answers in the tabs below. Required 1 Required 2 Determine each member's share of net income. Allocation of each member's Income Lopez Gomez Net income Salary allowances Balance of income Balance allocated Balance of income Shares of the members Total

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Saly and Jena formed a partnership with capital contributions of $300,000 and $400,000, respectively. Their partnership agreement calls for Saly to receive a $60,000 per year salary. Also, each partner is to receive an interest allowance equal to 10% of a partner's beginning capital investments. The remaining income or loss is to be divided equally. Net income for the current year is $150,000.Required: Calculate Saly’s share of Net income for the current year.
Stolton and Bright are partners in a business they started two years ago. The partnership agreement states that Stolton should receive a salary allowance of $10,700 and that Bright should receive a $20,600 salary allowance. Any remaining income or loss is to be shared equally. Determine each partner's share of the current year's net income of $54,000. Note: Enter all allowances as positive values. Enter losses, if any, as negative values. Allocation of Partnership Income Stolton Net income Salary allowances Bright Total $ 54,000 0 Balance of income Balance allocated equally 0 Balance of income $ 0 Shares of the partners $ 0 $ 0
Jhumpa, Stewart, and Kelly are all one-third partners in the capital and profits of Firewalker General Partnership. In addition to their normal share of the partnership's annual income, Jhumpa and Stewart receive an annual guaranteed payment of $10,000 each to compensate them for additional services they provide. Firewalker's income statement for the current year reflects the following revenues and expenses: Sales revenue Interest income Long-term capital gains Cost of goods sold Employee wages Depreciation expense Guaranteed payments Miscellaneous expenses (20,000) (4,500) Overall net income $ 97,000 Note: Leave no answer blank. Enter zero if applicable. Description Problem 09-64 Part b (Static) b. How will Firewalker allocate ordinary business income and separately stated items to its partners? Note: Round your intermediate calculations and final answers to the nearest whole dollar amount. Interest income Long-term capital gain Guaranteed payments Self-employment income $ 340,000…
Robert and Matthew have a partnership agreement which includes the following provisions regarding sharing net income or net loss: 1. A salary allowance of $47,600 to Robert and $36,400 to Matthew. 2. An interest allowance of 10% on capital balances at the beginning of the year. 3. The remainder to be divided 70% to Robert and 30% to Matthew. The capital balance on January 1, 2020, for Robert and Matthew was $99,000 and $135,000, respectively. During 2020, the Robert and Matthew Partnership had sales of $496,000, cost of goods sold of $285,000, and operating expenses of $84,000. Prepare an income statement for the Robert and Matthew Partnership for the year ended December 31, 2020. As a part of the income statement, include a Division of Net Income to each of the partners.
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JOhn and Mack are partners in a business. John's original capital was $39,700 and Mack's was $50,100. They agree to salaries of $11,300 and $18,600 for John and Mack, respectively, and 10% interest on original capital. If they agree to share the remaining profits and losses in a 3:2 ratio, what will John'a share of the income be if the income for the year is $74,100?
Hannah, Rose, and Rachael form an equal general partnership. Hannah and Rose each contribute $40,000 cash. Rachael contributes land with a basis of $48,000 and a fair market value of $100,000, subject to a nonrecourse liability of $60,000. Under section 752, assume that the liability will be allocated to the partners as follows: Hannah ($16,000); Rose ($16,000); and Rachael ($28,000). Prepare the partnership’s books following formation. *hint* - a partner’s tax capital account can be negative Assets Book Tax Liabilities Book Tax Capital Book Tax Determine each partner’s outside basis in the partnership.
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Stein agrees to pay Choi and Amal $10,000 each for a one-third (331⁄3%) interest in the Choi and Amal partnership. Immediately prior to Stein’s admission, each partner had a $30,000 capital balance. Make the journal entry to record Stein’s purchase of the partners’ interest.
Stolton and Bright are partners in a business they started two years ago. The partnership agreement states that Stolton should receive a salary allowance of $15,000 and that Bright should receive a $20,000 salary allowance. Any remaining income or loss is to be shared equally. Determine each partner’s share of the current year’s net income of $52,000.