Phillip and Waddington have formed a partnership. During their first year of operations, the partnership earned $150,000.Their-profit-and-loss-sharing agreement states that, first, each partner will receive 20% of their capital balances. The second level is based on services, with $10,000 to Phillip and $12,000 to Waddington. The remainder then will be shared 3:2 between Phillip and Waddington, respectively. Requirement 1. Calculate the amount of income each partner will receive under their profit-and-loss-sharing agreement assuming Phillip's capital balance is $85,000 and Waddington's capital balance is $85,000. (Complete all answer boxes. For amounts that are $0, make sure to enter "0" in the appropriate column
Phillip and Waddington have formed a partnership. During their first year of operations, the partnership earned $150,000.Their-profit-and-loss-sharing agreement states that, first, each partner will receive 20% of their capital balances. The second level is based on services, with $10,000 to Phillip and $12,000 to Waddington. The remainder then will be shared 3:2 between Phillip and Waddington, respectively. Requirement 1. Calculate the amount of income each partner will receive under their profit-and-loss-sharing agreement assuming Phillip's capital balance is $85,000 and Waddington's capital balance is $85,000. (Complete all answer boxes. For amounts that are $0, make sure to enter "0" in the appropriate column
SWFT Essntl Tax Individ/Bus Entities 2020
23rd Edition
ISBN:9780357391266
Author:Nellen
Publisher:Nellen
Chapter1: Introductin To Taxation
Section: Chapter Questions
Problem 5BD
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Question
Phillip and Waddington have formed a partnership. During their first year of operations, the partnership earned
$150,000.Their-profit-and-loss-sharing agreement states that, first, each partner will receive 20% of their capital balances. The second level is based on services, with $10,000 to Phillip and $12,000 to Waddington.
Requirement 1. Calculate the amount of income each partner will receive under their profit-and-loss-sharing agreement assuming Phillip's capital balance is $85,000 and Waddington's capital balance is $85,000.
(Complete all answer boxes. For amounts that are $0, make sure to enter "0" in the appropriate column
(Complete all answer boxes. For amounts that are $0, make sure to enter "0" in the appropriate column
Transcribed Image Text:Capital allocation:
Phillip
Waddington
Salary allowance:
Phillip
Waddington
Total salary and capital allocation
Net income (loss) remaining for allocation
Share of remainder:
Phillip
Waddington
Total allocation
Net income (loss) remaining for allocation
Net income (loss) allocated to the partners
17000
10000
27000
17000
12000
29000
(56000)
94000
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