Financial Accounting
15th Edition
ISBN: 9781337272124
Author: Carl Warren, James M. Reeve, Jonathan Duchac
Publisher: Cengage Learning
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Chapter 12, Problem 4CP
To determine
Suggest partners in developing a method for dividing income.
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Terry Willard and Jasmine Hill decide to form a partnership. Willard will contribute $300,000 to the partnership, while hill will contribute only $30,000. However, Hill will be responsible for running the day-to-day operations of the partnership, which are anticipated to require about 45 hours per week. In contrast, Willard will only work five hours per week for partnership. The two partners are attempting to determine a formula for dividing partnership net income. Willard believes the partners should divide income in the ratio of 7:3, favoring Willard, since Willard provides the majority of the capital. Hill believes the income should divided 7:3, favoring Hill, since Hill provides the majority of effort in running the partnership business. How would you advise the partners in developing a method for diving income?
Terry Willard and Jasmine Hill decide to form a partnership. Willard will contribute $300,000 to the partnership, while Hill will contribute only $30,000. However, Hill will be responsible for running the day-to-day operations of the partnership, which are anticipated to require about 45 hours per week. In contrast, Willard will only work five hours per week for the partnership. The two partners are attempting to determine a formula for dividing partnership net income. Willard believes the partners should divide income in the ratio of 7:3, favoring Willard, since Willard provides the majority of the capital. Hill believes the income should be divided 7:3, favoring Hill, since Hill provides the majority of effort in running the partnership business.How would you advise the partners in developing a method for dividing income?
Kali and Jane are contemplating on the profit-sharing strategy of the partnership. However, the selected modes of profit distribution vary according to their level of income. Jane was offered a salary of P50,000 or a salary of P20,000 plus a bonus of 15% of net income after salary and bonus. Per estimate, other partners were to receive also a salary amounting to P150,000. What income level would result to indifference on Jane?
Chapter 12 Solutions
Financial Accounting
Ch. 12 - Prob. 1DQCh. 12 - Prob. 2DQCh. 12 - Prob. 3DQCh. 12 - Prob. 4DQCh. 12 - Prob. 5DQCh. 12 - Prob. 6DQCh. 12 - Prob. 7DQCh. 12 - Prob. 8DQCh. 12 - Prob. 9DQCh. 12 - Prob. 10DQ
Ch. 12 - Prob. 1PEACh. 12 - Prob. 1PEBCh. 12 - Prob. 2PEACh. 12 - Prob. 2PEBCh. 12 - Prob. 3PEACh. 12 - Prob. 3PEBCh. 12 - Prob. 4PEACh. 12 - Prob. 4PEBCh. 12 - Prob. 5PEACh. 12 - Liquidating partnerships Prior to liquidating...Ch. 12 - Prob. 6PEACh. 12 - Prob. 6PEBCh. 12 - Revenue per employee Niles and Cohen, CPAs earned...Ch. 12 - Prob. 7PEBCh. 12 - Prob. 1ECh. 12 - Prob. 2ECh. 12 - Prob. 3ECh. 12 - Prob. 4ECh. 12 - Prob. 5ECh. 12 - Prob. 6ECh. 12 - Prob. 7ECh. 12 - Prob. 8ECh. 12 - Prob. 9ECh. 12 - Prob. 10ECh. 12 - Prob. 11ECh. 12 - Prob. 12ECh. 12 - Prob. 13ECh. 12 - Prob. 14ECh. 12 - Prob. 15ECh. 12 - Prob. 16ECh. 12 - Statement of members equity, admitting new member...Ch. 12 - Distribution of cash upon liquidation Hewitt and...Ch. 12 - Distribution of cash upon liquidation David Oliver...Ch. 12 - Liquidating partnershipscapital deficiency Lewis,...Ch. 12 - Prob. 21ECh. 12 - Prob. 22ECh. 12 - Statement of partnership liquidation After closing...Ch. 12 - Prob. 24ECh. 12 - Prob. 25ECh. 12 - Revenue per professional staff The accounting firm...Ch. 12 - Prob. 27ECh. 12 - Prob. 1PACh. 12 - Prob. 2PACh. 12 - Prob. 3PACh. 12 - Prob. 4PACh. 12 - Statement of partnership liquidation After the...Ch. 12 - Prob. 6PACh. 12 - Prob. 1PBCh. 12 - Prob. 2PBCh. 12 - Prob. 3PBCh. 12 - Prob. 4PBCh. 12 - Statement of partnership liquidation After the...Ch. 12 - On August 3, the firm of Chapelle, Rock, and Pryor...Ch. 12 - Prob. 1CPCh. 12 - Prob. 3CPCh. 12 - Prob. 4CP
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