Financial Accounting
15th Edition
ISBN: 9781337272124
Author: Carl Warren, James M. Reeve, Jonathan Duchac
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Question
Chapter 12, Problem 6DQ
To determine
Explain whether it is possible that the share of partners’ net income is more or less than the amount withdrawn?
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
During the current year, Marsha Engles withdrew $4,000 monthly from the partnership of Engles and Cox Water Management Consultants. Is it possible that her share of partnership net income for the current year might be more or less than $48,000? Explain.
Regina Harrison is a partner in Pressed for Time. An analysis of Regina Harrison's capital account
indicates that during the most recent year, she withdrew $20,000 from the partnership. Her share
of the partnership's net loss was $16,000 and she made an additional equity contribution of
$10,000. Her capital account ended the year at $150,000. What was her capital balance at the
beginning of the year?
a. $124,000
O b. $176,000
○ c.
$192,000
Od. $144,000
olivia Greer is a partner in Made for You. An analysis of Greer's capital account indicates during the most
recent year, she withdrew $21,000 from the partnership. Her share of partnership's net loss was $16,500
and she made an additional equity contribution of000. Her capital account ended the year at $151,000.
What was her capital balance at beginning of the year?
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
Knowledge Booster
Similar questions
- Choose the correct answerarrow_forwardAnthony and Erin start a partnership with capital contributions of $64,300 and $94,800, respectively. Over the course of the year, Anthony withdraws $2,300 from the business in order to meet his personal expenses. Which of the following is the correct journal entry to close Anthony's withdrawals account at the end of the year? O Anthony, Withdrawals 2,300 Anthony, Capital O Anthony, Withdrawals Cash 0 0 0 O Anthony, Capital Anthony, Withdrawals O Cash Anthony, Withdrawals 2,300 2,300 2,300 2,300 2,300 2,300 2,300arrow_forwardOn January 1, 2024, John Jarell, Andrew Martin, and Susan Montgomery formed a partnership by investing $100,000, $100,000, and $120,000 respectively. During the remainder of the year, John Jarell withdrew cash of $45,000, Andrew Martin withdrew $15,000 and Susan Montgomery withdrew $39,000. In addition, the following schedule shows how net income is allocated. Net income: Salaries: Interest: John Jarell Andrew Martin Susan Montgomery Total 100,000 21,000 5,000 26,000 Total salary and interest: Remainder to be allocated: Remainder allocated between partners: 8,000 Balance of net income to be allocated: Total to be allocated to each partner: Date 34,000 18,000 5,000 23,000 8,000 31,000 Page GJ2 F Debit Credit 21,000 6,000 27,000 b) Calculate the post-closing balance in each partners' capital account. John Jarell, Capital Andrew Martin, Capital Susan Montgomery, Capital. 8,000 35,000 a) Prepare the entry to close the income summary account. Enter an appropriate description and the date in…arrow_forward
- PLEASE HELP ME TO SOLVE THIS QUESTIONarrow_forwardWade has a beginning basis in a partnership of $31,000. His share of income and expense from the partnership consists of the following amounts: Ordinary income $53,4000 Guaranteed Payment $17,600 Long-term capital gain 21,900 1231 gain 5,100 Charitable contributions 2400 179 expense 27,600 Cash distribution 10,000 Required: a. What is Wade's self employment income? b. Calculate Wade's basis at the end of the year. Amount a. self-employment income b. ending basisarrow_forwardRight answerarrow_forward
- Tiana and Alyssa share income equally. For the current year, the partnership remaining net income is $75,000 after accounting for salary allowances. Tiana made withdrawals of $23,000 and Alyssa made withdrawals of $32,000. At the beginning of the year, the capital account balances were: Tiana capital, $92,000 and Alyssa capital, $126,000. Tiana’s capital account balance at the end of the year is $131,500 $106,500 $134,000 $129,500arrow_forwardRyan, Maria and Mike are partners in a law firm. Thepartnership earned $1,200,000 net profit during the financial year ending 30 June 2020 and did not pay any salary to any of the partners during the year. On 1 July 2019, Maria loaned $100,000 to the partnership and received $10,000 interest from the partnership over the 2019/2020 fiscal year, which is already considered in calculating partnership earning for the year. Meanwhile, Maria also earned $200 from gambling. Allowable deductions for Maria during the year consist of $300 paid for allowable professional subscriptions.Calculate net tax liability for Maria(Use tables for your answers, no narration is acceptable and allowed for this question, no case or sections of law are required to be mentioned, only provide calculations please, ignore Medicare Levy and Medicare Levy Surcharge for this question).arrow_forwardFB Manufacturing Company is a partnership among Yolando Gonzalez, Willies Todd, and Linda Walkers. The partnership contract states that partnership profits will be split equally among the three partners. During the current year Gonzalez withdrew $25,000, Todd withdrew $23,000, and Walker withdrew $35,000. net income of FB Manufacturing company amounted $180,000. a. calculates each partner's share of net income for the period.b. describes the effects, if any that partnership operations would have on the individual tax returns of the partnerc. prepare a statement of partners' equity for the year. Assume that partners’ capital accounts had beginning balances of $50,000, $60,000, and $40,000 for Gonzalez, Todd, and Walkers respectively.arrow_forward
- Taylor and Tanner formed a partnership. Taylor contributed $50,000 in cash. Tanner contributed land and buildings he purchased for $50,000 some time ago. His tax basis in the property is now $30,000, although it was recently appraised for $70,000. There is a $15,000 mortgage attached to the building that the partnership will assume. What is the amount of Tanner’s capital account after his contribution? a. $50,000 b. $30,000 c. $35,000 d. $55,000arrow_forwardCheck my answer. Ellie and Linda are equal owners in Otter Enterprises, a calendar year business. During the current year, Otter Enterprises has $320,000 of gross income and $210,000 of operating expenses. In addition, Otter has a long-term capital gain of $15,000 and makes distributions to Ellie and Linda of $25,000 each. Discuss the impact of this information on the taxable income of Otter, Ellie, and Linda if Otter is: A partnership. Income generated for a partnership is taxable at the shareholder level Otter - less expenses = ordinary income (320,000-210,000=110,000) Add capital gain 110,000+15,000=125,000 taxable income Divide by each partners’ share (Ellie and Linda) = 125,000/2=62,500 taxable income for each partner. An S corporation. S Corps generally do not pay Federal Income tax. Income generated for an S Corp is passed through to the shareholder and each shareholder pays taxes on their share. Since there are two shareholders, Ellie, and Linda. Otter - less…arrow_forwardBarry and Kurt are equal partners in the BK partnership. Barry receives a guaranteed payment of $57,000. In addition to the guaranteed payment, Barry withdraws $11,000 from the partnership. The partnership has $25,600 in ordinary income during the year. a. How much income must Barry report from the BK partnership? b. What is the effect of the distribution on Barry's partnership basis? a. income to Barry b. Barry's partnership basisarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Individual Income TaxesAccountingISBN:9780357109731Author:HoffmanPublisher:CENGAGE LEARNING - CONSIGNMENT
Individual Income Taxes
Accounting
ISBN:9780357109731
Author:Hoffman
Publisher:CENGAGE LEARNING - CONSIGNMENT