Oriole Co. reports net income of $53,000. Partner salary allowances are Pitts $17,000, Filbert $6,000, and Witten $8,000. Indicate thedivision of net income to each partner, assuming the income ratio is 55: 22:23, respectively.SalaryallowanceRemainingincomeTotaldivision ofnetincomeLAPitts$$Division of Net IncomeFilbert$$Wittento$$CATotal

In a partnership firm, salary allowances are first deducted from the net income and then the…

Answered: Oriole Co. reports net income of…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Lynn Carpenter and Matthew Fredrick formed a partnership in which the partnership agreement provided for salary allowances of $50,000 and $44,000, respectively. Determine the division of a $25,000 net loss for the current year, assuming that remaining income or losses are shared equally by the two partners. Use the minus sign to indicate any deductions or deficiencies. Lynn Carpenter Matthew Fredrick Total Salary Allowance $ $ $ Remainder $ $ $ Net Loss $ $ $
The partnership of Chase and Chloe shares profits and losses in a 70:30 ratio respectively after Chloe receives a $11,000 salary. Prepare a schedule showing how the profit and loss should be divided, assuming the profit or loss for the year is: If an amount is zero, enter "0". For those boxes in which you must enter subtractive or negative numbers use a minus sign. (Example: -300) A. $40,000 Chase Chloe Total Salaries $fill in the blank 1 $fill in the blank 2 $fill in the blank 3 Remaining income allocation fill in the blank 4 fill in the blank 5 fill in the blank 6 Total division of income $fill in the blank 7 $fill in the blank 8 $fill in the blank 9 B. $6,000 Chase Chloe Total Salaries $fill in the blank 10 $fill in the blank 11 $fill in the blank 12 Remaining income allocation fill in the blank 13 fill in the blank 14 fill in the blank 15 Total division of income $fill in the blank 16 $fill in the blank 17 $fill in the blank 18 C. $(10,000) Chase…
EXERCISE 6-13. Problem Solving 4. Alloy and Aeson are partners who share profits and losses in the ratio 60% and 40%, respectively. Alloy and Aeson are given salary allowances of P120,000 and P60,000, respectively. The partners are also paid interest on their ending capital balances. In 2019, amounts of interest received by Alloy and Aeson were P60,000 and P24,000, respectively. Subsequent allocations using profit and loss ratio were then made after salary allowances and interest payments had been provided for. You are required to determine the total partnership net income if Aeson's share in the residual income (balance after salary allowances and interest) was P120,000 in 2019.
Arnold (A), Bower (B), and Chambers (C) are partners in a small manufacturing firm whose net assets are as follows: (attached)The partnership agreement calls for the allocation of profits and losses as follows:a. Salaries to A, B, and C of $30,000, $30,000, and $40,000, respectively.b. Bonus to A of 10% of net income after the bonus.c. Remaining amounts are allocated according to profit and loss percentages of 50%, 20%, and 30% for A, B, and C, respectively.Unfortunately, the business finds itself in difficult times: Annual profits remain flat at approximately $132,000, additional capital is needed to finance equipment which is necessary to stay competitive, and all of the partners realize that they could make more money working for someone else, with a lot fewer headaches.Chambers has identified Dawson (D) as an individual who might be willing to acquire an interest in the partnership. Dawson is proposing to acquire a 30% interest in the capital of the partnership and a revised…
Scenario B: Partners A, B, and C operate a business with profit sharing agreement ratios of 5: 3:2, and capital balances of $300,000, $200,000, and $100,000 respectively. The total income for the year is $180,000. Each partner receives a fixed salary of $50, 000, and they are entitled to earn 10% interest on their capital balances. Calculate the total income allocated to Partner
4
Wildhorse Co. reports net income of $62,000. Partner salary allowances are Pitts $17,000, Filbert $6,000, and Witten $4,000. Indicate the division of net income to each partner, assuming the income ratio is 56:27:17. respectively. Salary allowance Remaining income Total division of net income $ $ Pitts $ S Division of Net Income Filbert S Witten S S Tot:
Dividing Partnership Income Beau Dawson and Willow McDonald formed a partnership, investing $276,000 and $92,000, respectively. Determine their participation in the year’s net income of $380,000 under each of the following independent assumptions: a. No agreement concerning division of net income.b. Divided in the ratio of original capital investment.c. Interest at the rate of 5% allowed on original investments and the remainder divided in the ratio of 2:3.d. Salary allowances of $47,000 and $59,000, respectively, and the balance divided equally.e. Allowance of interest at the rate of 5% on original investments, salary allowances of $47,000 and $59,000, respectively, and the remainder divided equally. Dawson McDonald a. $fill in the blank 1 $fill in the blank 2 b. $fill in the blank 3 $fill in the blank 4 c. $fill in the blank 5 $fill in the blank 6 d. $fill in the blank 7 $fill in the blank 8 e. $fill in the blank 9 $fill in the blank 10
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Dividing Partnership Net Income Required: Steve Conyers and Chelsy Stevens formed a partnership, dividing income as follows: 1. Annual salary allowance to Conyers of $125,280. 2. Interest of 7% on each partner's capital balance on January 1. 3. Any remaining net income divided to Conyers and Stevens, 1:2. Conyers and Stevens had $66,000 and $105,000, respectively, in their January 1 capital balances. Net income for the year was $216,000. How much is distributed to Conyers and Stevens? Note: Compute partnership share. Conyers: $ Stevens: $
Dividing Partnership Income Morrison and Greene have decided to form a partnership. They have agreed that Morrison is to invest $237,000 and that Greene is to invest $79,000. Morrison is to devote one-half time to the business, and Greene is to devote full time. The following plans for the division of income are being considered: Equal division. In the ratio of original investments. In the ratio of time devoted to the business. Interest of 6% on original investments and the remainder equally Interest of 6% on original investments, salary allowances of $50,000 to Morrison and $70,000 to Greene, and the remainder equally Plan (e), except that Greene is also to be allowed a bonus equal to 20% of the amount by which net income exceeds the total salary allowances Required: For each plan, determine the division of the net income under each of the following assumptions: (1) net income of $118,000 and (2) net income of $225,000. Round answers to the nearest whole dollar. (1) (2)…

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