Principles of Accounting Volume 1
19th Edition
ISBN: 9781947172685
Author: OpenStax
Publisher: OpenStax College
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Chapter 15, Problem 3EA
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The partnership agreement of Angela and Dawn has the following provisions:
The partners are to earn 10 percent on the average capital.
Angela and Dawn are to earn salaries of $26,000 and $18,000, respectively.
Any remaining income or loss is to be divided between Angela and Dawn using a 70:30 ratio.
Angela’s average capital is $66,000 and Dawn’s is $52,000.
Required:
Prepare an income distribution schedule assuming the income of the partnership is (a) $90,000 and (b) $33,000. If no partnership agreement exists, what does the UPA 1997 prescribe as the profit or loss distribution percentages?
Note: Amounts that are to be deducted from an individual partner's capital balance should be entered with a minus sign.
The partnership agreement of Angela and Dawn has the following provisions:
The partners are to earn 10 percent on the average capital.Angela and Dawn are to earn salaries of $31,000 and $15,000, respectively.Any remaining income or loss is to be divided between Angela and Dawn using a 70:30 ratio.
Angela’s average capital is $63,000 and Dawn’s is $44,000.Required:Prepare an income distribution schedule assuming the income of the partnership is (a) $91,000 and (b) $22,000. If no partnership agreement exists, what does the UPA 1997 prescribe as the profit or loss distribution percentages? (Amounts that are to be deducted from an individual partner's capital balance should be entered with a minus sign.)
The partnership agreement of Angela and Dawn has the following provisions:
1. The partners are to earn 10 percent on the average capital.
2. Angela and Dawn are to earn salaries of $32,000 and $15,500, respectively.
3. Any remaining income or loss is to be divided between Angela and Dawn using a
70:30 ratio.
Angela's average capital is $68,000 and Dawn's is $53,000.
Required:
Prepare an income distribution schedule assuming the income of the partnership is (a)
$81,000 and (b) $26,000. If no partnership agreement exists, what does the UPA 1997
prescribe as the profit or loss distribution percentages? (Amounts that are to be
deducted from an individual partner's capital balance should be entered with a
minus sign.)
Angela
Dawn
Total
(a) Distribution of $81,000 income:
Profit percentage
%
%
0%
Average capital
Net income
Interest on average capital
Salary
Residual income (deficit)
Allocate
Total
0
0
$
0
0
$
0
$
0
$
0
(b) Distribution of $26,000 income:
Profit percentage
Average capital
Net…
Chapter 15 Solutions
Principles of Accounting Volume 1
Ch. 15 - A partnership ________. A. has one owner B. can...Ch. 15 - Any assets invested by a particular partner in a...Ch. 15 - Which of the following is a disadvantage of the...Ch. 15 - Mutual agency is defined as: A. a mutual agreement...Ch. 15 - Chani contributes equipment to a partnership that...Ch. 15 - Juan contributes marketable securities to a...Ch. 15 - Which one of the following would not be considered...Ch. 15 - A well written partnership agreement should...Ch. 15 - What type of assets may a partner not contribute...Ch. 15 - How does a newly formed partnership handle the...
Ch. 15 - Thandie and Marco are partners with capital...Ch. 15 - Thandie and Marco are partners with capital...Ch. 15 - Thandie and Marco are partners with capital...Ch. 15 - Thandie and Marco are partners with capital...Ch. 15 - When a partnership dissolves, the first step in...Ch. 15 - When a partnership dissolves, the last step in the...Ch. 15 - Prior to proceeding with the liquidation, the...Ch. 15 - Does a partnership pay income tax?Ch. 15 - Can a partners personal assets in a limited...Ch. 15 - Can a partnership assume liabilities as part of...Ch. 15 - Does each partner have to contribute an equal...Ch. 15 - What types of bases for dividing partnership net...Ch. 15 - Angela and Agatha are partners in Double A...Ch. 15 - On February 3, 2016 Sam Singh invested $90,000...Ch. 15 - Why do partnerships dissolve?Ch. 15 - What are the four steps involved in liquidating a...Ch. 15 - When a partner withdraws from the firm, which...Ch. 15 - What is the first step in a partnership...Ch. 15 - When a partnership liquidates, do partners get...Ch. 15 - Coffee Partners decides to close due to the...Ch. 15 - On May 1, 2017, BJ and Paige formed a partnership....Ch. 15 - The partnership of Chase and Chloe shares profits...Ch. 15 - The partnership of Tasha and Bill shares profits...Ch. 15 - Cheese Partners has decided to close the store. At...Ch. 15 - The partnership of Michelle, Amal, and Maureen has...Ch. 15 - The partnership of Tatum and Brook shares profits...Ch. 15 - Arun and Margot want to admit Tammy as a third...Ch. 15 - When a partnership is liquidated, any gains or...Ch. 15 - The partnership of Magda and Sue shares profits...Ch. 15 - The partnership of Arun, Margot, and Tammy has...Ch. 15 - Match each of the following descriptions with the...Ch. 15 - While sole proprietorships and corporations are...Ch. 15 - A partnership is thriving. The three partners get...
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- Arun and Margot want to admit Tammy as a third partner for their partnership. Their capital balances prior to Tammys admission are $50,000 each. Prepare a schedule showing how the bonus should be divided among the three, assuming the profit or loss agreement will be 1:3 once Tammy has been admitted and her contribution is: A. $20,000 B. $80,000 C. $50,000. In addition, show the resulting journal entries to each of the three partners capital accounts.arrow_forwardThe partnership of Tatum and Brook shares profits and losses in a 60:40 ratio respectively after Tatum receives a 10,000 salary and Brook receives a 15,000 salary. Prepare a schedule showing how the profit and loss should be divided, assuming the profit or loss for the year is: A. $40,000 B. $25,000 C. ($5,000) In addition, show the resulting entries to each partners capital account. Tatums capital account balance is $50,000 and Brooks is $60,000.arrow_forwardThe partnership of Magda and Sue shares profits and losses in a 50:50 ratio after Mary receives a $7,000 salary and Sue receives a $6,500 salary. Prepare a schedule showing how the profit and loss should be divided, assuming the profit or loss for the year is: A. $10,000 B. $5,000 C. ($12,000) In addition, show the resulting entries to each partners capital account.arrow_forward
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