On February 1, 2023, Tessa Williams and Audrey Xie formed a partnership in Ontario. Williams contributed $85,000 cash and Xiecontributed land valued at $125,000 and a small building valued at $185,000. Also, the partnership assumed responsibility for Xie's$135,000 long-term note payable associated with the land and building. The partners agreed to share profit or loss as follows: Williamsis to receive an annual salary allowance of $95,000, both are to receive an annual interest allowance of 15% of their original capitalinvestments, and any remaining profit or loss is to be shared equally. On November 20, 2023, Williams withdrew cash of $65,000 andXie withdrew $50,000. After the adjusting entries and the closing entries to the revenue and expense accounts, the Income Summaryaccount had a credit balance of $165,000.Required:1. Present general journal entries to record the initial capital investments of the partners, their cash withdrawals, and the December 31closing of the Income Summary and withdrawals accounts.

Given below solution Explanation: 1) Journal entries to record the transaction are as follows :-…

Answered: On February 1, 2023, Tessa Williams and…

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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On February 1, 2020, Tessa Williams and Audrey Xie formed a partnership in Ontario. Williams contributed $89,000 cash and Xie contributed land valued at $129,000 and a small building valued at $189,000. Also, the partnership assumed responsibility for Xie’s $139,000 long-term note payable associated with the land and building. The partners agreed to share profit or loss as follows: Williams is to receive an annual salary allowance of $99,000, both are to receive an annual interest allowance of 12% of their original capital investments, and any remaining profit or loss is to be shared equally. On November 20, 2020, Williams withdrew cash of $69,000 and Xie withdrew $54,000. After the adjusting entries and the closing entries to the revenue and expense accounts, the Income Summary account had a credit balance of $169,000.Required:1. Present general journal entries to record the initial capital investments of the partners, their cash withdrawals, and the December 31 closing of the Income…
On July 1, 2019, Olga, Mega and Giga formed the OMG Partnership, by combining their separate business proprietorships. Olga contributed cash of P150,000. Mega contributed property with a carrying amount of P108,000, original cost of P120,000. and a fair value of P240,000. The partnership accepted responsibility for the P105,000 mortgage attached to the property. Giga contributed equipment with a carrying amount of P90,000, original cost of P225,000 and fair market value of P165,000. The partnership agreement specifies that profits and losses are to be shared equally. How much is the investment of Mega? Using the information in no. 2, and assuming capital are based on their profit and loss agreement, how much is the implied bonus? *
heng invested $108,000 and Murray invested $208,000 in a partnership. They agreed to share incomes and losses by allowing a $62,000 per year salary allowance to Zheng and a $42,000 per year salary allowance to Murray, plus an interest allowance on the partners' beginning-year capital investments at 10%, with the balance to be shared equally. Assuming net income for the current year is $109,000, the journal entry to allocate net income is: Debit Income Summary, $109,000; Credit Zheng, Capital, $54,500, Credit Murray, Capital, $54,500. Debit Income Summary, $109,000; Credit Zheng, Capital, $36,600, Credit Murray, Capital, $72,400. Debit Zheng, Capital, $59,500, Debit Murray, Capital, $49,500; Credit Income Summary, $109,000; Debit Income Summary, $109,000; Credit Zheng, Capital, $59,500, Credit Murray, Capital, $49,500. Debit Income Summary, $109,000; Credit Zheng, Capital, $42,900, Credit Murray, Capital, $66,100.
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