Rodgers and Winter had capital balances of $60,000 and $90,000, respectively, at the beginning of the current fiscal year. The articles of partnership provide for salary allowances of $25,000 and $30,000, respectively; an allowance of interest at 12% on the capital balances at the beginning of the year; and the remaining net income divided equally. Net income for the current year was $110,000.a. Present the Division of net income section of the income statement for the current year.Net income $110,000 RodgersWinterTotal Division of net income: Salary allowance$fill in the blank 1 $fill in the blank 2 $fill in the blank 3 Interest allowancefill in the blank 4 fill in the blank 5 fill in the blank 6 Totalfill in the blank 7 fill in the blank 8 fill in the blank 9 fill in the blank 11 fill in the blank 12 fill in the blank 13 Net income$fill in the blank 14 $fill in the blank 15 $fill in the blank 16 b. Assuming that the net income had been $65,000 instead of $110,000, present the Division of net income section of the income statement for the current year.Net income $65,000 RodgersWinterTotalDivision of net income: Salary allowance $fill in the blank 17 $fill in the blank 18 $fill in the blank 19 Interest allowance fill in the blank 20 fill in the blank 21 fill in the blank 22 Total fill in the blank 23 fill in the blank 24 fill in the blank 25 fill in the blank 27 fill in the blank 28 fill in the blank 29 Net income

Rodgers Capital =$60,000 Winter Capital =$90,000 Rodgers Salary allowance=$25,000 Winter Salary…

Answered: Rodgers and Winter had capital balances…

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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Rodgers and Winter had capital balances of $60,000 and $90,000, respectively, at the beginning of the current fiscal year. The articles of partnership provide for salary allowances of $25,000 and $30,000, respectively; an allowance of interest at 12% on the capital balances at the beginning of the year; and the remaining net income divided equally. Net income for the current year was $110,000.

a. Present the Division of net income section of the income statement for the current year.

Net income			$110,000

	Rodgers	Winter	Total
Division of net income:
	Salary allowance	$fill in the blank 1		$fill in the blank 2		$fill in the blank 3
	Interest allowance	fill in the blank 4		fill in the blank 5		fill in the blank 6
	Total	fill in the blank 7		fill in the blank 8		fill in the blank 9
		fill in the blank 11		fill in the blank 12		fill in the blank 13
Net income	$fill in the blank 14		$fill in the blank 15		$fill in the blank 16

b. Assuming that the net income had been $65,000 instead of $110,000, present the Division of net income section of the income statement for the current year.

Net income			$65,000

	Rodgers	Winter	Total
Division of net income:
	Salary allowance		$fill in the blank 17	$fill in the blank 18	$fill in the blank 19
	Interest allowance		fill in the blank 20	fill in the blank 21	fill in the blank 22
	Total		fill in the blank 23	fill in the blank 24	fill in the blank 25
			fill in the blank 27	fill in the blank 28	fill in the blank 29
Net income

Definition Definition Arrangement between two or more people whereby they agree to manage business operations and share its profits and losses in an agreed ratio. The agreement drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, and drawings of a partner.

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