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
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
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
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 2 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education