The partnership of Angel Investor Associates began operations on January 1, 2015, with contributions from two partners as follows: Dennis Overton Ben Testerman $99,500 43,780 The following additional partner transactions took place during the year: 1. In early January, Randy Campbell is admitted to the partnership by contributing $55,720 cash for a 28% interest. 2. Net income of $250,000 was earned in 2015. In addition, Dennis Overton received a salary allowance of $60,000 for the year. The three partners agree to an income-sharing ratio equal to their capital balances after admitting Campbell. 3. The partners' withdrawals are equal to half of the increase in their capital balances from salary allowance and income. Prepare a statement of partnership equity for the year ended December 31, 2015. If an amount box does not require an entry, leave it blank. Angel Investor Associates Statement of Partnership Equity For the Year Ended December 31, 20Y5 Balances, January 1, 2015 Admission of Randy Campbell Salary allowance Remaining income Partner withdrawals Balances, December 31, 2015 Dennis Overton, Capital 99,500 Ben Testerman, Capital 43,780 Randy Campbell, Capital Total Partnership Capital 143,280 55,720 55,720 60,000 60,000 172,500 X 52,500 X 70,000 X 259,000 X
The partnership of Angel Investor Associates began operations on January 1, 2015, with contributions from two partners as follows: Dennis Overton Ben Testerman $99,500 43,780 The following additional partner transactions took place during the year: 1. In early January, Randy Campbell is admitted to the partnership by contributing $55,720 cash for a 28% interest. 2. Net income of $250,000 was earned in 2015. In addition, Dennis Overton received a salary allowance of $60,000 for the year. The three partners agree to an income-sharing ratio equal to their capital balances after admitting Campbell. 3. The partners' withdrawals are equal to half of the increase in their capital balances from salary allowance and income. Prepare a statement of partnership equity for the year ended December 31, 2015. If an amount box does not require an entry, leave it blank. Angel Investor Associates Statement of Partnership Equity For the Year Ended December 31, 20Y5 Balances, January 1, 2015 Admission of Randy Campbell Salary allowance Remaining income Partner withdrawals Balances, December 31, 2015 Dennis Overton, Capital 99,500 Ben Testerman, Capital 43,780 Randy Campbell, Capital Total Partnership Capital 143,280 55,720 55,720 60,000 60,000 172,500 X 52,500 X 70,000 X 259,000 X
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
Partnership Accounting
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings, admission of a new partner, etc.
Partner Admission and Withdrawal
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is 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, drawings of a partner, etc.
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Transcribed Image Text:The partnership of Angel Investor Associates began operations on January 1, 2015, with contributions from two partners as follows:
Dennis Overton
Ben Testerman
$99,500
43,780
The following additional partner transactions took place during the year:
1. In early January, Randy Campbell is admitted to the partnership by contributing $55,720 cash for a 28% interest.
2. Net income of $250,000 was earned in 2015. In addition, Dennis Overton received a salary allowance of $60,000 for the year. The three
partners agree to an income-sharing ratio equal to their capital balances after admitting Campbell.
3. The partners' withdrawals are equal to half of the increase in their capital balances from salary allowance and income.
Prepare a statement of partnership equity for the year ended December 31, 2015. If an amount box does not require an entry, leave it blank.
Angel Investor Associates
Statement of Partnership Equity
For the Year Ended December 31, 20Y5
Balances, January 1, 2015
Admission of Randy
Campbell
Salary allowance
Remaining income
Partner withdrawals
Balances, December 31,
2015
Dennis Overton,
Capital
99,500
Ben Testerman,
Capital
43,780
Randy Campbell,
Capital
Total Partnership
Capital
143,280
55,720
55,720
60,000
60,000
172,500 X
52,500 X
70,000 X
259,000 X
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