(2)Prepare a schedule showing the distribution of net income, assuming net income is $27,000. (If an amount reduces the accountbalance then enter with a negative sign preceding the number or parenthesis, eg. -15,000, (15,000)DIVISION OF NET INCOMEMcGillSmythTotalSalary allowanceInterest allowanceTotal salaries and interestRemaining income /deficiencyTotal division of net income24eTextbook and MediaSave for LaterAttempts: 0 of 5 usedSubmit Answer(b)Journalize the allocation of net income in each of the situations above. (Credit account titles are automatically indented when amountis entered. Do not indent manually. Record entries in the order presented in the previous part.)No. Account Titles and ExplanationDebitCredit1.2.>> McGill and Smyth have capital balances on January 1 of $53,000 and $34,000, respectively. The partnership income-sharingagreement provides for (1) annual salaries of $16,000 for McGill and $17,000 for Smyth, (2) interest at 10% on beginning capitalbalances, and (3) remaining income or loss to be shared 70% by McGill and 30% by Smyth.(a)(1)Prepare a schedule showing the distribution of net income, assuming net income is $66,000. (If an amount reduces the accountbalance then enter with a negative sign preceding the number or parenthesis, e.g. -15,000, (15,000).)DIVISION OF NET INCOMEMcGillSmythTotalSalary allowance$$$Interest allowanceTotal salaries and interestRemaining income/deficiencyTotal division of net income$$$%24%24%24%24

McGill and Smyth have capital balances on January 1 of $53,000 and $34,000, respectively. The partnership income-sharing agreement provides for (1) annual salaries of $16,000 for McGill and $17,000 for Smyth, (2) interest at 10% on beginning capital balances, and (3) remaining income or loss to be shared 70% by McGill and 30% by Smyth. (a) (1) Prepare a schedule showing the distribution of net income, assuming net income is $66,000. (If an amount reduces the account balance then enter with a negative sign preceding the number or parenthesis, e.g.-15,000, (15,000).)

McGill and Smyth have capital balances on January 1 of $53,000 and $34,000, respectively. The partnership income-sharing agreement provides for (1) annual salaries of $16,000 for McGill and $17,000 for Smyth, (2) interest at 10% on beginning capital balances, and (3) remaining income or loss to be shared 70% by McGill and 30% by Smyth. (a) (1) Prepare a schedule showing the distribution of net income, assuming net income is $66,000. (If an amount reduces the account balance then enter with a negative sign preceding the number or parenthesis, e.g.-15,000, (15,000).)

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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Goodman, Pinkman, and White formed a partnership on January 1, 2020, and made capital contributions of $125,000 (Goodman), $175,000 (Pinkman), and $250,000 (White), respectively. With respect to the division of income, they agreed to the following: (1) interest of an amount equal to 10% of the that partner’s beginning capital balance for the year; (2) annual compensation of $15,000 to Pinkman; and (3) the remainder of the income or loss to be split among the partners in the following percentages: (a) 20% for Goodman; (b) 40% for Pinkman; and (c) 40% for White. Net income was $200,000 in 2020 and $240,000 in 2021. Each partner withdrew $1,500 for personal use every month during 2020 and 2021. What was Goodman’s total share of net income for 2020?
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