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not receive credit. Lloyd and Harry, equal partners, form revenue, expenses, gains, losses, an

not receive credit. Lloyd and Harry, equal partners, form revenue, expenses, gains, losses, an

FINANCIAL ACCOUNTING
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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Hmm.145.

Note: Please show detailed calculations and explanations. Answers without showing calculations/explanations, will not receive credit. Lloyd and Harry, equal partners, form the Ant World Partnership. During the year, Ant World had the following revenue, expenses, gains, losses, and distributions: Cost of Goods Sold Cash Distribution to Harry Municipal Bond Interest Short-Term Capital Gains Employee Wages Rent Charitable Contributions Sales Repairs and Maintenance Long-Term Capital Gains Fines and Penalties $ 91,500 $ 16,300 $ 2,800 $ 5,800 $ 41,300 $ 11,300 26,300 $ $ 181,500 $ 6,300 $ 13,300 $ 6,300 Guaranteed Payment to Lloyd $ 26,300 Given these items, what amount of ordinary business income (loss) and what separately stated items should be allocated to each partner for the year? Hint: You should process this question in the following 4 steps: 1. Identify all separated items 2. Ordinary income = Sum (All items) - sum (all separated items) 3. Allocate ordinary income to each partner using their partnership interest (50% in this case since there are only 2 and they are equal partner) 4. Allocate EACH separate item to each partner. Pay attention because there are items which will be allocated to only 1 partner and not the other
Transcribed Image Text:Note: Please show detailed calculations and explanations. Answers without showing calculations/explanations, will not receive credit. Lloyd and Harry, equal partners, form the Ant World Partnership. During the year, Ant World had the following revenue, expenses, gains, losses, and distributions: Cost of Goods Sold Cash Distribution to Harry Municipal Bond Interest Short-Term Capital Gains Employee Wages Rent Charitable Contributions Sales Repairs and Maintenance Long-Term Capital Gains Fines and Penalties $ 91,500 $ 16,300 $ 2,800 $ 5,800 $ 41,300 $ 11,300 26,300 $ $ 181,500 $ 6,300 $ 13,300 $ 6,300 Guaranteed Payment to Lloyd $ 26,300 Given these items, what amount of ordinary business income (loss) and what separately stated items should be allocated to each partner for the year? Hint: You should process this question in the following 4 steps: 1. Identify all separated items 2. Ordinary income = Sum (All items) - sum (all separated items) 3. Allocate ordinary income to each partner using their partnership interest (50% in this case since there are only 2 and they are equal partner) 4. Allocate EACH separate item to each partner. Pay attention because there are items which will be allocated to only 1 partner and not the other
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