Norrudin, Norsal, and Nasheb operate a partnership with a complex profit and loss sharing agreement. The average capital balance for each partner on December 31, 2006 is $300,000 for Norrudin, $250,000 for Norsal, and $325,000 for Nasheb. An 8.5% interest allocation is provided to each partner. Norrudin and Nasheb receive salary allocations of $10,000 and $15,000, respectively. All residual income is allocated in the ratios of 2:3:5 to Norrudin, Norsal, and Nasheb, respectively. (a) Prepare a schedule to allocate income to the partners assuming that partnership net income is $270,000. (b) Prepare a journal entry to distribute the partnership's income to the partners.

Norrudin, Norsal, and Nasheb operate a partnership with a complex profit and loss sharing agreement. The average capital balance for each partner on December 31, 2006 is $300,000 for Norrudin, $250,000 for Norsal, and $325,000 for Nasheb. An 8.5% interest allocation is provided to each partner. Norrudin and Nasheb receive salary allocations of $10,000 and $15,000, respectively. All residual income is allocated in the ratios of 2:3:5 to Norrudin, Norsal, and Nasheb, respectively. (a) Prepare a schedule to allocate income to the partners assuming that partnership net income is $270,000. (b) Prepare a journal entry to distribute the partnership's income to the partners.

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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