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- A, B and C were partners with capital balances on January 1, 2020 of 100,000, 150,000, and 200,000 respectively. Their profit and loss ratio is 50%, 30% and 20%, respectively. On July 1, 2020, A retires from the partnership. On the date of retirement the partnership net income is 140,000 and the partners agreed that inventories are to be revalued at 70,000 from its original cost of 50,000. The partnership agreed further to pay A, 195,000 in settlement of his interest. What are the capital balances of the remaining partners after the retirement of A using bonus method?Entries for Allocation of Net Income Danny Spurlock and Tracy Wilson decided to form a partnership on July 1, 20-1. Spurlock invested $100,000 and Wilson invested $25,000. For the fiscal year ended June 30, 20-2, a net income of $79,000 was earned. Determine the amount of net income that Spurlock and Wilson would receive under each of the following independent assumptions: Income to be allocated $fill in the blank 1 Spurlock Wilson Total 1. There is no agreement concerning the distribution of net income. $fill in the blank 2 $fill in the blank 3 $fill in the blank 4 2. Each partner is to receive 10% interest on their original investment. The remaining net income is to be divided equally. $fill in the blank 5 $fill in the blank 6 $fill in the blank 7 3. Spurlock and Wilson are to receive a salary allowance of $33,000 and $24,000, respectively.The remaining net income is to be divided equally. $fill in the blank 8 $fill in the blank 9 $fill in the blank 10 4. Each…X, Y and Z were the partners in a partnership firm. The following information were relating to the business at the end of the year 2019: i. Capital balance of partners X, Y, Z as on 1st January, 2019 was RO 120000, RO 80000 and RO 60000 respectively. ii. Current account balance of partners as on 1st January, 2019: X: RO 45500 (Cr), Y: RO 32600 (Dr) Z: RO 22100 (Cr) iii. Drawings taken by the partners during the year was: X: RO 8800 Y: RO 7500 Z: RO 5400 iv. Interest…
- X, Y and Z were the partners in a partnership firm. The following information were relating to the business at the end of the year 2019: i. Capital balance of partners X, Y, Z as on 1st January, 2019 was RO 120000, RO 80000 and RO 60000 respectively. ii. Current account balance of partners as on 1st January, 2019: X: RO 45500 (Cr), Y: RO 32600 (Dr) Z: RO 22100 (Cr) iii. Drawings taken by the partners during the year was: X: RO 8800 Y: RO 7500 Z: RO 5400 iv. Interest on drawings…The account balances for April & May LLP on January 1,2020, were as follows: April, Capital 200,00. May, Capital, 100,000. April and May shared net income and losses in the ratio of 3:2 respectively. The partners agreed to admit July to the partnership with a 35% interest in partnership capital and net income. July invested 100,000 cash and no goodwill was recognized. What is the balance of April’s capital account after the new partnership is created?Assume the partnership income-sharing agreement calls for income to be divided with a salary of $41,000 to Coburn and $36,000 to Webb, interest of 10% on beginning capital, and the remainder divided 50%-50%. Prepare the journal entry to record the allocation of net income. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Income Summary Coburn, Capital Webb, Capital Debit 68000 Credit 33850 32150
- Prepare separate journal entries to record the transfer of each proprietorship’s assets and liabilities to the partnership. Further, it is agreed that Sorensen will invest an additional $5,100 in cash, and Lucas will invest an additional $19.400 in cash. Journalize the additional cash investment by each partner. Prepare a classified balance sheet for the partnership on January 1, 2022.Please answer all parts thxA and B are equal partners. Assume that the partnership net income in the current year is 340800. The partnership agreement states as follows: Partners are entitle to Salary of: A - $45,000; B - $38,000 Interest on Capital: A - $7,000; B - $6,000 Interest charged on drawings: A - $2,500; B - $1,800 The Partners share profits and losses as follows: A: 60%; B: 40% Complete the multiple spaces below to calculate the Taxable Income of each partner. Just state the figure without any commas, full stops or dollar signs. If the figure is a negative, show it in brackets, eg (3000)
- The partnership business of John Estrada and Peter Arroyo was formed on January 2, 2020. At that date, the following assets were invested as derived from their respective sole proprietor’s books. Book of Estrada Book of ArroyoCash………………………………………………..P145,000 160,000Accounts receivable………………………….. 80,000 50,000Allowance for doubtful accounts………… (5,000) (3,000)Merchandise inventory…………………….. 200,000 190,000 Partner’s agreement as follows:1. Estrada and Arroyo’s adjusted capital contributions must be equal. In the event that one’s contribution will exceed the other, any one of them shall withdraw “Cash” from their respective investment.2. Their respective Accounts…A partnership begins its first year with the following capital balances: The articles of partnership stipulate that profits and losses be assigned in the following manner: Bernard is allocated compensation of $18,000 per year. Each partner is allowed to withdraw up to $5,000 cash per year. Any remaining profits and losses are allocated on a 3:3:4 basis, respectively. Each partner is allowed to withdraw up to $5,000 cash per year. Assuming that the net income is $60,000 and that each partner withdraws the maximum amount allowed, what is the balance in Collins capital account at the end of that year? $70,800 $86,700 $73,500 $81,700The balance in Xue's capital account includes an additional investment of $10,000 made on May 5, 20Y2. Instructions: 1. Prepare an income statement for 20Y2, indicating the division of net income. The partnership agreement provides for salary allowances of $38,000 to Ramirez and $46,000 to Xue, allowances of 10% on each partner's capital balance at the beginning of the fiscal year, and equal division of the remaining net income or a net loss. 2. prepare a statement of partnership equity for 20Y2. 3. Prepare a balance sheet as of the end of 20Y2.
