Robert and Matthew have a partnership agreement which includes the following provisions regarding sharing net income or net loss: 1. A salary allowance of $47,600 to Robert and $36,400 to Matthew. 2. An interest allowance of 10% on capital balances at the beginning of the year. 3. The remainder to be divided 70% to Robert and 30% to Matthew. The capital balance on January 1, 2020, for Robert and Matthew was $99,000 and $135,000, respectively. During 2020, the Robert and Matthew Partnership had sales of $496,000, cost of goods sold of $285,000, and operating expenses of $84,000. Prepare an income statement for the Robert and Matthew Partnership for the year ended December 31, 2020. As a part of the income statement, include a Division of Net Income to each of the partners.
Robert and Matthew have a partnership agreement which includes the following provisions regarding sharing net income or net loss: 1. A salary allowance of $47,600 to Robert and $36,400 to Matthew. 2. An interest allowance of 10% on capital balances at the beginning of the year. 3. The remainder to be divided 70% to Robert and 30% to Matthew. The capital balance on January 1, 2020, for Robert and Matthew was $99,000 and $135,000, respectively. During 2020, the Robert and Matthew Partnership had sales of $496,000, cost of goods sold of $285,000, and operating expenses of $84,000. Prepare an income statement for the Robert and Matthew Partnership for the year ended December 31, 2020. As a part of the income statement, include a Division of Net Income to each of the partners.
Chapter4: Gross Income: Concepts And Inclusions
Section: Chapter Questions
Problem 12DQ
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Transcribed Image Text:Robert and Matthew have a partnership agreement which includes the following provisions regarding sharing net income or net loss:
1.
A salary allowance of $47,600 to Robert and $36,400 to Matthew.
2.
An interest allowance of 10% on capital balances at the beginning of the year.
3.
The remainder to be divided 70% to Robert and 30% to Matthew.
The capital balance on January 1, 2020, for Robert and Matthew was $99,000 and $135,000, respectively. During 2020, the Robert
and Matthew Partnership had sales of $496,000, cost of goods sold of $285,000, and operating expenses of $84,000.
Prepare an income statement for the Robert and Matthew Partnership for the year ended December 31, 2020. As a part of the income
statement, include a Division of Net Income to each of the partners.
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