On January 1, 2023, the dental partnership of Angela, Diaz, and Krause was formed when the partners contributed $42,000, $65,000, and $72,000, respectively. Over the next three years, the business reported net income and (loss) as follows: 2023 2024 2025 $ 82,000 54,000 (37,000) During this period, each partner withdrew cash of $14,000 per year. Krause invested an additional $4,000 in cash on February 9, 2024. At the time that the partnership was created, the three partners agreed to allocate all profits and losses according to a specified plan written as follows: • Each partner is entitled to interest computed at the rate of 10 percent per year based on the individual capital balances at the beginning of that year. . ⚫ Because of prior work experience, Angela is entitled to an annual salary allowance of $11,500 per year, and Diaz is entitled to an annual salary allowance of $10,200 per year. • Any remaining profit will be split as follows: Angela, 20 percent; Diaz, 35 percent; and Krause, 45 percent. If a net loss remains after . the initial allocations to the partners, the balance will be allocated: Angela, 30 percent; Diaz, 45 percent; and Krause, 25 percent. Required: Prepare a schedule that determines the ending capital balance for each partner as of the end of each of these three years. Answer is not complete. Complete this question by entering your answers in the tabs below. Ending Capital Ending Capital Ending Capital Balance 2023 Balance 2024 Balance 2025 Prepare a schedule that determines the ending capital balance for each partner as of the end of 2025. Note: Amounts to be deducted should be indicated with minus sign. Do not round intermediate calculations. Round your final answers to nearest dollar amounts. ANGELA, DIAZ and KRAUSE Statement of Partners' Capital For the Year Ending December 31, 2025 Angela Beginning balances $ Diaz Krause 56,978 $ 90,634 $ 87,388 Income allocation Drawings (14,000) (14,000) Ending balances $ 42,978 $ 76,634 (14,000) Total $ 235,000 0 (42,000) < Ending Capital Balance 2024 $ 73,388 $ 193,000 Ending Capital Balance 2025 >

On January 1, 2023, the dental partnership of Angela, Diaz, and Krause was formed when the partners contributed $42,000, $65,000, and $72,000, respectively. Over the next three years, the business reported net income and (loss) as follows: 2023 2024 2025 $ 82,000 54,000 (37,000) During this period, each partner withdrew cash of $14,000 per year. Krause invested an additional $4,000 in cash on February 9, 2024. At the time that the partnership was created, the three partners agreed to allocate all profits and losses according to a specified plan written as follows: • Each partner is entitled to interest computed at the rate of 10 percent per year based on the individual capital balances at the beginning of that year. . ⚫ Because of prior work experience, Angela is entitled to an annual salary allowance of $11,500 per year, and Diaz is entitled to an annual salary allowance of $10,200 per year. • Any remaining profit will be split as follows: Angela, 20 percent; Diaz, 35 percent; and Krause, 45 percent. If a net loss remains after . the initial allocations to the partners, the balance will be allocated: Angela, 30 percent; Diaz, 45 percent; and Krause, 25 percent. Required: Prepare a schedule that determines the ending capital balance for each partner as of the end of each of these three years. Answer is not complete. Complete this question by entering your answers in the tabs below. Ending Capital Ending Capital Ending Capital Balance 2023 Balance 2024 Balance 2025 Prepare a schedule that determines the ending capital balance for each partner as of the end of 2025. Note: Amounts to be deducted should be indicated with minus sign. Do not round intermediate calculations. Round your final answers to nearest dollar amounts. ANGELA, DIAZ and KRAUSE Statement of Partners' Capital For the Year Ending December 31, 2025 Angela Beginning balances $ Diaz Krause 56,978 $ 90,634 $ 87,388 Income allocation Drawings (14,000) (14,000) Ending balances $ 42,978 $ 76,634 (14,000) Total $ 235,000 0 (42,000) < Ending Capital Balance 2024 $ 73,388 $ 193,000 Ending Capital Balance 2025 >

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter13: Choice Of Business Entity—general Tax And Nontax Factors/formation

Section: Chapter Questions

Problem 43P

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