Financial Accounting
Financial Accounting
15th Edition
ISBN: 9781337272124
Author: Carl Warren, James M. Reeve, Jonathan Duchac
Publisher: Cengage Learning
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Chapter 12, Problem 3E
To determine

Determine the participation of partners in the net income of the year under various independent assumptions.

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Dividing Partnership Income Tyler Hawes and Piper Albright formed a partnership, investing $70,000 and $210,000, respectively. Determine their participation in the year's net income of $108,000 under each of the following independent assumptions: a. No agreement concerning division of net income. b. Divided in the ratio of original capital investment. c. Interest at the rate of 5% allowed on original investments and the remainder divided in the ratio of 2:2. d. Salary allowances of $34,000 and $47,000, respectively, and the balance divided equally. e. Allowance of interest at the rate of 5% on original investments, salary allowances of $34,000 and $47,000, respectively, and the remainder divided equally. Hawes Albright (a) (b) (c) (d) (e) $
Dividing partnership income Carmelo Fernandez and Bobby Morett formed a partnership, investing $120,000 and $180,000, respectively. Determine their participation in the year's net income of $275,000 under each of the following independent assumptions: a. No agreement concerning division of net income. b. Divided in the ratio of original capital investment. c. Interest at the rate of 6% allowed on original investments and the remainder divided in the ratio of 2:3. d. Salary allowances of $40,000 and $45,000, respectively, and the balance divided equally. e. Allowance of interest at the rate of 6% on original investments, salary allowances of $40,000 and $45,000, respectively, and the remainder divided equally. Fernandez Morett $ 137,500 ✓ a. b. C. d. e. $ 137,500 ✓ $ 110,000 ✓ $ $ Feedback X X $ $ 165,000 ✓ X X ✓ Check My Work Set up a column for each partner and a total column. a. Determine the distribution of income and losses in the absence of a partnership agreement. b. Use the…
Dividing partnership income Carmelo Fernandez and Bobby Morett formed a partnership, investing $187,500 and $62,500, respectively. Determine their participation in the year's net income of $290,000 under each of the following independent assumptions: a. No agreement concerning division of net income. b. Divided in the ratio of original capital investment. c. Interest at the rate of 5% allowed on original investments and the remainder divided in the ratio of 2:3. d. Salary allowances of $38,000 and $45,000, respectively, and the balance divided equally. e. Allowance of interest at the rate of 5% on original investments, salary allowances of $38,000 and $45,000, respectively, and the remainder divided equally. Fernandez Morett a. b. C. d. e.

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Financial Accounting

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