Partnership : An association of more than one party with the objective of sharing profit and losses is called partnership. It is one form of business organization where risk is shared among two or more partners for their mutual benefit. The liability of partners is unlimited in partnership. Partnership can be easily formed because the process is simples and there less complexities in legal rules. Journalizing: It is the process of recording the transactions of an organization in a chronological order. Based on these journal entries recorded, the amounts are posted to the relevant ledger accounts. Accounting rules for journal entries: To increase balance of the account: Debit assets, expenses, losses and credit all liabilities, capital, revenue and gains. To decrease balance of the account: Credit assets, expenses, losses and debit all liabilities, capital, revenue and gains. Distribution of Income: In a partnership, the income of is distributed by the way of salaries, interest on the partners capital and balance income upon the agreed ratios. It is the sharing of the net income of partnership among partners. To prepare: Journal entries to record the division of net income.

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Answer 1

Question

Chapter 12, Problem 12.2AP

(a)

(1)

To determine

Partnership: An association of more than one party with the objective of sharing profit and losses is called partnership. It is one form of business organization where risk is shared among two or more partners for their mutual benefit. The liability of partners is unlimited in partnership. Partnership can be easily formed because the process is simples and there less complexities in legal rules.

Journalizing: It is the process of recording the transactions of an organization in a chronological order. Based on these journal entries recorded, the amounts are posted to the relevant ledger accounts.

Accounting rules for journal entries:

To increase balance of the account: Debit assets, expenses, losses and credit all liabilities, capital, revenue and gains.

To decrease balance of the account: Credit assets, expenses, losses and debit all liabilities, capital, revenue and gains.

Distribution of Income: In a partnership, the income of is distributed by the way of salaries, interest on the partners capital and balance income upon the agreed ratios. It is the sharing of the net income of partnership among partners.

To prepare: Journal entries to record the division of net income.

(2)

To determine

To prepare: Journal entries to record the division of net income.

(3)

To determine

To prepare: Journal entries to record the division of net income.

(b)

To determine

To prepare: A schedule showing the division of net income under assumption (3) above.

(c)

To determine

To prepare: A partners’ capital statement for the year under the assumption (3) above.

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Answer 2

Question

Chapter 12, Problem 12.2AP

(a)

(1)

To determine

Partnership: An association of more than one party with the objective of sharing profit and losses is called partnership. It is one form of business organization where risk is shared among two or more partners for their mutual benefit. The liability of partners is unlimited in partnership. Partnership can be easily formed because the process is simples and there less complexities in legal rules.

Journalizing: It is the process of recording the transactions of an organization in a chronological order. Based on these journal entries recorded, the amounts are posted to the relevant ledger accounts.

Accounting rules for journal entries:

To increase balance of the account: Debit assets, expenses, losses and credit all liabilities, capital, revenue and gains.

To decrease balance of the account: Credit assets, expenses, losses and debit all liabilities, capital, revenue and gains.

Distribution of Income: In a partnership, the income of is distributed by the way of salaries, interest on the partners capital and balance income upon the agreed ratios. It is the sharing of the net income of partnership among partners.

To prepare: Journal entries to record the division of net income.

(2)

To determine

To prepare: Journal entries to record the division of net income.

(3)

To determine

To prepare: Journal entries to record the division of net income.

(b)

To determine

To prepare: A schedule showing the division of net income under assumption (3) above.

(c)

To determine

To prepare: A partners’ capital statement for the year under the assumption (3) above.

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Answer 3

Question

Chapter 12, Problem 12.2AP

(a)

(1)

To determine

Partnership: An association of more than one party with the objective of sharing profit and losses is called partnership. It is one form of business organization where risk is shared among two or more partners for their mutual benefit. The liability of partners is unlimited in partnership. Partnership can be easily formed because the process is simples and there less complexities in legal rules.

Journalizing: It is the process of recording the transactions of an organization in a chronological order. Based on these journal entries recorded, the amounts are posted to the relevant ledger accounts.

Accounting rules for journal entries:

To increase balance of the account: Debit assets, expenses, losses and credit all liabilities, capital, revenue and gains.

To decrease balance of the account: Credit assets, expenses, losses and debit all liabilities, capital, revenue and gains.

Distribution of Income: In a partnership, the income of is distributed by the way of salaries, interest on the partners capital and balance income upon the agreed ratios. It is the sharing of the net income of partnership among partners.

To prepare: Journal entries to record the division of net income.

(2)

To determine

To prepare: Journal entries to record the division of net income.

(3)

To determine

To prepare: Journal entries to record the division of net income.

(b)

To determine

To prepare: A schedule showing the division of net income under assumption (3) above.

(c)

To determine

To prepare: A partners’ capital statement for the year under the assumption (3) above.

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Answer 4

Question

Chapter 12, Problem 12.2AP

(a)

(1)

To determine

Partnership: An association of more than one party with the objective of sharing profit and losses is called partnership. It is one form of business organization where risk is shared among two or more partners for their mutual benefit. The liability of partners is unlimited in partnership. Partnership can be easily formed because the process is simples and there less complexities in legal rules.

Journalizing: It is the process of recording the transactions of an organization in a chronological order. Based on these journal entries recorded, the amounts are posted to the relevant ledger accounts.

Accounting rules for journal entries:

To increase balance of the account: Debit assets, expenses, losses and credit all liabilities, capital, revenue and gains.

To decrease balance of the account: Credit assets, expenses, losses and debit all liabilities, capital, revenue and gains.

Distribution of Income: In a partnership, the income of is distributed by the way of salaries, interest on the partners capital and balance income upon the agreed ratios. It is the sharing of the net income of partnership among partners.

To prepare: Journal entries to record the division of net income.

(2)

To determine

To prepare: Journal entries to record the division of net income.

(3)

To determine

To prepare: Journal entries to record the division of net income.

(b)

To determine

To prepare: A schedule showing the division of net income under assumption (3) above.

(c)

To determine

To prepare: A partners’ capital statement for the year under the assumption (3) above.

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Answer 5

Chapter 12, Problem 12.2AP

(a)

(1)

To determine

Partnership: An association of more than one party with the objective of sharing profit and losses is called partnership. It is one form of business organization where risk is shared among two or more partners for their mutual benefit. The liability of partners is unlimited in partnership. Partnership can be easily formed because the process is simples and there less complexities in legal rules.

Journalizing: It is the process of recording the transactions of an organization in a chronological order. Based on these journal entries recorded, the amounts are posted to the relevant ledger accounts.

Accounting rules for journal entries:

To increase balance of the account: Debit assets, expenses, losses and credit all liabilities, capital, revenue and gains.

To decrease balance of the account: Credit assets, expenses, losses and debit all liabilities, capital, revenue and gains.

Distribution of Income: In a partnership, the income of is distributed by the way of salaries, interest on the partners capital and balance income upon the agreed ratios. It is the sharing of the net income of partnership among partners.

To prepare: Journal entries to record the division of net income.

(2)

To determine

To prepare: Journal entries to record the division of net income.

(3)

To determine

To prepare: Journal entries to record the division of net income.

(b)

To determine

To prepare: A schedule showing the division of net income under assumption (3) above.

(c)

To determine

To prepare: A partners’ capital statement for the year under the assumption (3) above.

Answer 6

Chapter 12, Problem 12.2AP

(a)

(1)

To determine

Partnership: An association of more than one party with the objective of sharing profit and losses is called partnership. It is one form of business organization where risk is shared among two or more partners for their mutual benefit. The liability of partners is unlimited in partnership. Partnership can be easily formed because the process is simples and there less complexities in legal rules.

Journalizing: It is the process of recording the transactions of an organization in a chronological order. Based on these journal entries recorded, the amounts are posted to the relevant ledger accounts.

Accounting rules for journal entries:

To increase balance of the account: Debit assets, expenses, losses and credit all liabilities, capital, revenue and gains.

To decrease balance of the account: Credit assets, expenses, losses and debit all liabilities, capital, revenue and gains.

Distribution of Income: In a partnership, the income of is distributed by the way of salaries, interest on the partners capital and balance income upon the agreed ratios. It is the sharing of the net income of partnership among partners.

To prepare: Journal entries to record the division of net income.

Answer 7

Chapter 12, Problem 12.2AP

(a)

(1)

To determine

Partnership: An association of more than one party with the objective of sharing profit and losses is called partnership. It is one form of business organization where risk is shared among two or more partners for their mutual benefit. The liability of partners is unlimited in partnership. Partnership can be easily formed because the process is simples and there less complexities in legal rules.

Journalizing: It is the process of recording the transactions of an organization in a chronological order. Based on these journal entries recorded, the amounts are posted to the relevant ledger accounts.

Accounting rules for journal entries:

To increase balance of the account: Debit assets, expenses, losses and credit all liabilities, capital, revenue and gains.

To decrease balance of the account: Credit assets, expenses, losses and debit all liabilities, capital, revenue and gains.

Distribution of Income: In a partnership, the income of is distributed by the way of salaries, interest on the partners capital and balance income upon the agreed ratios. It is the sharing of the net income of partnership among partners.

To prepare: Journal entries to record the division of net income.

Answer 8

(2)

To determine

To prepare: Journal entries to record the division of net income.

Answer 9

(2)

To determine

To prepare: Journal entries to record the division of net income.

Answer 10

(3)

To determine

To prepare: Journal entries to record the division of net income.

Answer 11

(3)

To determine

To prepare: Journal entries to record the division of net income.

Answer 12

(b)

To determine

To prepare: A schedule showing the division of net income under assumption (3) above.

Answer 13

(b)

To determine

To prepare: A schedule showing the division of net income under assumption (3) above.

Answer 14

(c)

To determine

To prepare: A partners’ capital statement for the year under the assumption (3) above.

Answer 15

(c)

To determine

To prepare: A partners’ capital statement for the year under the assumption (3) above.

Answer 16

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Answer 17

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Answer 18

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Answer 19

Ch. 12 - Prob. 1Q Ch. 12 - Prob. 2Q Ch. 12 - Prob. 3Q Ch. 12 - Prob. 4Q Ch. 12 - Prob. 5Q Ch. 12 - Prob. 6Q Ch. 12 - Prob. 7Q Ch. 12 - Prob. 8Q Ch. 12 - Prob. 9Q Ch. 12 - Prob. 10Q

Concept explainers

To prepare: Journal entries to record the division of net income.

To prepare: Journal entries to record the division of net income.

To prepare: A schedule showing the division of net income under assumption (3) above.

To prepare: A partners’ capital statement for the year under the assumption (3) above.

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