Required information [The following information applies to the questions displayed below.] Ramer and Knox began a partnership by investing $90,000 and $135,000, respectively. 3. The partners agreed to share income by giving a $70,000 per year salary allowance to Ramer, a $44,000 per year salary allowance to Knox, 8% interest on their initial capital investments, and the remaining balance shared equally. Net income is $260,000. (Enter all allowances as positive values. Enter losses as negative values.) Ramer Knox Total Net Income Salary allowances Interest allowances Total salary and interest Balance of income Balance allocated equally Balance of income Shares of the partners

Required information [The following information applies to the questions displayed below.] Ramer and Knox began a partnership by investing $90,000 and $135,000, respectively. 3. The partners agreed to share income by giving a $70,000 per year salary allowance to Ramer, a $44,000 per year salary allowance to Knox, 8% interest on their initial capital investments, and the remaining balance shared equally. Net income is $260,000. (Enter all allowances as positive values. Enter losses as negative values.) Ramer Knox Total Net Income Salary allowances Interest allowances Total salary and interest Balance of income Balance allocated equally Balance of income Shares of the partners

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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Assume the G&L partnership forms with cash contributions of $100,000 each from G and L. The partnership then borrows $800,000 on a nonrecourse loan and purchases a building on leased land for $1,000,000. Assume that the building is rented and that annual cash revenues equal cash expenses but depreciation of $50,000 per year results in a $50,000 annual loss. All items of income, loss, and deduction are shared equally. When is the first year that the partnership will record Partnership
Gerald and Julia are joining their separate business to form a partnership and they agreed to share profits in the manner of 55% for Gerald and 45% for Julia. Property is to be contributed for a total capital of P800,000. The partners agreed to make their capital accounts equal after formation. How much cash must be contributed by each of the partners after they contributed their properties? Gerald Julia Book Value Fair Value Book Value Fair Value Accounts Receivable 60,000 60,000 - - Inventories 60,000 90,000 160,000 180,000 Equipment 100,000 80,000 180,000 190,000 Accounts Payable 30,000 30,000 20,000 20,000
Daggett, Lamppin, and Pendergast are partners who share profits and losses 50%, 30%, and 20%, respectively. Their capital balances are $140,000, $80,000, and $55,000, respectively. (a) Your answer is correct. Assume Sanford joins the partnership by investing $135,000 for a 25% interest with bonuses to the existing partners. Prepare the journal entry to record his investment. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries.) Account Titles and Explanation Cash Sanford, Capital Daggett, Capital Lamppin, Capital Pendergast, Capital + + + Debit 135000 Credit 102500 16250 9750 6500
6) Oliva Tsang and David Breck began a partnership by investing $5,000 and $45,000 respectively. For the year-ended December 31, 2009, the partnership earned $100,000. The partners agree to share income by allowing a $65,000 per year salary allowance to Breck, a $15,000 per year salary allowance to Tsang, 5% interest on beginning capital balances and the remainder equally. a) Prepare calculations that show how the income should be allocated to the partners under the following plans for sharing net incomes and losses.
Dd.112.
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