1. Introduction: In partnership arrangements, income/loss earned by partnership firm is distributed amongst partner in the manner agreed upon. To determine : Table showing distribution of income of $450,000 as per three different plans. Table showing distribution of income of $450,000 as per three different plans: Income (Loss) Sharing Plan Calculations Bi Br Ba Total (a) $450,000 in 1:1:1 ratio i.e. 1/3 of 450,000 to be distributed equally 150,000 150,000 150,000 450,000 (b) $450,000 in Capital investment ratio i.e. 675:2625:4200 40,500 157,500 252,000 450,000 (c) Salary allowance - Total 230,000 80,000 60,000 90,000 230,000 Interest on 10% of investment 6,750 26,250 42,000 75,000 Balance $145,000 in 2:4:4 29,000 58,000 58,000 145,000 Total distribution 115,750 144,250 190,000 450,000 2. Introduction: In partnership arrangements, income/loss earned by partnership firm is distributed amongst partner in the manner agreed upon. To determine : Statement of partners’ equity showing the allocation of income. Statement of partners’ equity showing the allocation of income: Particulars Bi Br Ba Total Initial Capital Investment 67,500 262,500 420,000 750,000 Add: Salary allowances 80,000 60,000 90,000 230,000 Add: Interest on 10% of investment 6,750 26,250 42,000 75,000 Less: Balance i.e. (209,000-230,000-75000) in 2:4:4 ratio (19,200) (38,400) (38,400) (96,000) Less: Drawings (34,000) (48,000) (64,000) (146,000) Capital account balances at year end 101,050 262,350 449,600 813,000 3. Introduction: In partnership arrangements, income/loss earned by partnership firm is distributed amongst partner in the manner agreed upon. To determine : Journal entries for distribution of income and closure of withdrawals account. Journal entries for distribution of income and closure of with drawls account. Date Particulars Debit Amount ($) Credit Amount ($) Dec 31 Profit and loss account 209,000 To Bi Capital account 67,550 To Br Capital account 47,850 To Ba Capital account 93,600 (Being income earned distributed amongst partners as per plan C Dec 31 Bi Capital account 34,000 Br Capital account 48,000 Ba Capital account 64,000 To Drawings account 146,000 (Being drawings made debited to capital account of partner)

Financial Accounting: Information for Decisions

8th Edition

ISBN: 9781259533006

Author: John J Wild

Publisher: McGraw-Hill Education

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Orion Enterprises data for the year 2019 is presented below: • Credit sales during the year: $5,200,000 • Accounts receivable - December 31, 2019: $480,000 • Allowance for bad debts - December 31, 2019: $40,000 ⚫ Bad debt expense for the year: $25,000 What amount will Orion Enterprises report on its year-end balance sheet for the net realizable value of its accounts receivable? A. $445,000 B. $440,000 C. $480,000 D. $460,000

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