Homework Help is Here – Start Your Trial Now!
Business
Accounting
What amount is due to G's estate on December 31?

What amount is due to G's estate on December 31?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
Question

What amount is due to G's estate on December 31?

Partners D, E, F, and G, share profits 40%, 30%, 15%, and 15%, respectively. Their partnership agreement provides that in the event of the death of a partner, the firm ball continue until the end of the fiscal period. Profits shall be considered to have heen earned proportionately during this period, and the deceased partners' capital shall be adjusted by the proper share of the profit or loss until the date of death. From that date until the date of settlement with the estate there shall be added interest at 6% computed on the adjusted capital. The remaining partners shall continue to share profits in the old ratio. Payment to the estate shall be made within one year from the date of the partner's death. Partner G died on November 16 On December 31, the end of the six-month period, account balances on the partnership books before the income summary account is closed are as follows: P15,000 140,000 190,000 90,000 33,000 Notes payable Accounts payable D, capital E, capital F, capital G, capital Income summary P30,000 141,000 Cash Accounts receivable Inventories 84,000 75,000 48,000 45,000 45,000 P468.000 Machinery, net Store furniture, net P468,000 The income summary account is closed on December 31. On this date, F decides to retire, D and E agree to pay the balance in F's capital account after distributions of profit, less 20%, and issue a partnership 60-day, 6% note to F in settlement.
Transcribed Image Text:Partners D, E, F, and G, share profits 40%, 30%, 15%, and 15%, respectively. Their partnership agreement provides that in the event of the death of a partner, the firm ball continue until the end of the fiscal period. Profits shall be considered to have heen earned proportionately during this period, and the deceased partners' capital shall be adjusted by the proper share of the profit or loss until the date of death. From that date until the date of settlement with the estate there shall be added interest at 6% computed on the adjusted capital. The remaining partners shall continue to share profits in the old ratio. Payment to the estate shall be made within one year from the date of the partner's death. Partner G died on November 16 On December 31, the end of the six-month period, account balances on the partnership books before the income summary account is closed are as follows: P15,000 140,000 190,000 90,000 33,000 Notes payable Accounts payable D, capital E, capital F, capital G, capital Income summary P30,000 141,000 Cash Accounts receivable Inventories 84,000 75,000 48,000 45,000 45,000 P468.000 Machinery, net Store furniture, net P468,000 The income summary account is closed on December 31. On this date, F decides to retire, D and E agree to pay the balance in F's capital account after distributions of profit, less 20%, and issue a partnership 60-day, 6% note to F in settlement.
Expert Solution
steps

Step by step

Solved in 2 steps with 1 images

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Estate taxes
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS