McGill and Smyth have capital balances on January 1 of $41,000 and $34,000, respectively. The partnership income-sharingagreement provides for (1) annual salaries of $25,000 for McGill and $17,000 for Smyth, (2) interest at 12% on beginning capitalbalances, and (3) remaining income or loss to be shared 60% by McGill and 40% by Smyth.(a)(1)Prepare a schedule showing the distribution of net income, assuming net income is $85,000. (If an amount reduces the accountbalance then enter with a negative sign preceding the number or parenthesis, e.g. -15,000, (15,000).)Salary allowanceInterest allowanceTotal salaries and interestDIVISION OF NET INCOMEMcGillSmyth$Total$Remaining income/deficiencyTotal division of net income$$$(2)Prepare a schedule showing the distribution of net income, assuming net income is $23,000. (If an amount reduces the accountbalance then enter with a negative sign preceding the number or parenthesis, e.g. -15,000, (15,000).)Salary allowanceInterest allowanceTotal salaries and interestDIVISION OF NET INCOMEMcGillSmyth$Remaining income/deficiencyTotal division of net income$$$Total

Detailed calculation and explanation:a.1 Net income is $ 85,000McGillSmythTotalSalary allowance…

Answered: McGill and Smyth have capital balances…

Financial Accounting

14th Edition

ISBN:9781305088436

Author:Carl Warren, Jim Reeve, Jonathan Duchac

Publisher:Carl Warren, Jim Reeve, Jonathan Duchac

Chapter12: Accounting For Partnerships And Limited Liability Companies

Section: Chapter Questions

Problem 3PB

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The 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.
McGill and Smyth have capital balances on January 1 of $53,000 and $34,000, respectively. The partnership income-sharing agreement provides for (1) annual salaries of $16,000 for McGill and $17,000 for Smyth, (2) interest at 10% on beginning capital balances, and (3) remaining income or loss to be shared 70% by McGill and 30% by Smyth. (a) (1) Prepare a schedule showing the distribution of net income, assuming net income is $66,000. (If an amount reduces the account balance then enter with a negative sign preceding the number or parenthesis, e.g. -15,000, (15,000).) DIVISION OF NET INCOME McGill Smyth Total Salary allowance $ $ $ Interest allowance Total salaries and interest Remaining income/ deficiency Total division of net income $ $ $ %24 %24 %24 %24
McGill and Smyth have capital balances on January 1 of $50,000 and $40,000, respectively. The partnership income-sharing agreement provides for (1) annual salaries of $22,000 for McGill and $13,000 for Smyth, (2) interest at 10% on beginning capital balances, and (3) remaining income or loss to be shared 60% by McGill and 40% by Smyth. Prepare a schedule showing the distribution of net income, assuming net income is $50,000
McGill and Smyth have capital balances on January 1 of $40,000 and $43,000, respectively. The partnership income-sharing agreement provides for (1) annual salaries of $20,000 for McGill and $10,000 for Smyth, (2) interest at 10% on beginning capital balances, and (3) remaining income or loss to be shared 60% by McGill and 40% by Smyth. (a) (1) Prepare a schedule showing the distribution of net income, assuming net income is $81,000. (If an amount reduces the account balance then enter with a negative sign preceding the number or parenthesis, e.g.-15,000, (15,000).) Salary allowance Interest allowance Total salaries and interest Remaining income/ deficiency Total division of net income (2) Salary allowance Interest allowance Total salaries and interest Remaining Income/ deficiency $ Total division of net income $ DIVISION OF NET INCOME Prepare a schedule showing the distribution of net income, assuming net income is $24,000. (If an amount reduces the account balance then enter with a…
Reardon and Reese had capital balances of $140,000 and $160,000, respectively, at the beginning of the current fiscal year. The partnership agreement provides for salary allowances of $25,000 and $35,000, respectively; an allowance of interest at 12% on the capital balances at the beginning of the year; and the remaining net income divided equally. Net income for the current year was $120,000. a. Present the Division of net income statement for the current year. Net income $120,000 Reardon Reese Total Division of net income: Salary allowance $fill in the blank 1 $fill in the blank 2 $fill in the blank 3 Interest allowance fill in the blank 4 fill in the blank 5 fill in the blank 6 fill in the blank 8 fill in the blank 9 fill in the blank 10 Net income $fill in the blank 11 $fill in the blank 12 $fill in the blank 13 b. Assuming that the net income had been $76,000 instead of $120,000, present the Division of…
la. Pike, Quinn, and Reed are forming a parthnershipOn March 31 of the current year, the capital accounts of the three existing partners and theirshares of profits and losses are as follows: RequirementsA partnership reports net income of $70,000. The partnership agreement has defined an incomesharing ratio, which provides for salaries of $15,000 to Pike and $10,000 to Quinn. Any remainingprofit is allocated based on profit and loss ratio. What division of profits would you recommend to Pike, Quinn and Redd?
The balance in Xue's capital account includes an additional investment of $10,000 made on May 5, 20Y2. Instructions: 1. Prepare an income statement for 20Y2, indicating the division of net income. The partnership agreement provides for salary allowances of $38,000 to Ramirez and $46,000 to Xue, allowances of 10% on each partner's capital balance at the beginning of the fiscal year, and equal division of the remaining net income or a net loss. 2. prepare a statement of partnership equity for 20Y2. 3. Prepare a balance sheet as of the end of 20Y2.
Essa Al Raisi and Kadir Al Mandhri have capital balances on January 1 of $40,000 and $70,000, respectively. The partnership income-sharing agreement provides for annual salaries of $24,000 for Essa Al Raisi and $15,000 for Kadir Al Mandhri, interest at 10% on beginning capital balances, and remaining income or loss to be shared 60% by Essa Al Raisi and 40% by Kadir Al Mandhri. Instructions Prepare a schedule showing the distribution of net income, assuming net income is $60,000 and $42,000 Journalize the allocation of net income in each of the situations above.
Rodgers and Winter had capital balances of $60,000 and $90,000, respectively, at the beginning of the current fiscal year. The articles of partnership provide for salary allowances of $25,000 and $30,000, respectively; an allowance of interest at 12% on the capital balances at the beginning of the year; and the remaining net income divided equally. Net income for the current year was $110,000. a. Present the Division of net income section of the income statement for the current year. Net income $110,000 Rodgers Winter Total Division of net income: Salary allowance $fill in the blank 1 $fill in the blank 2 $fill in the blank 3 Interest allowance fill in the blank 4 fill in the blank 5 fill in the blank 6 Total fill in the blank 7 fill in the blank 8 fill in the blank 9 fill in the blank 11 fill in the blank 12 fill in the blank 13 Net income $fill in the blank 14 $fill in the…
Coburn (beginning capital, $60,000) and Webb (beginning capital $90,000) are partners. During 2020, the partnership earned net income of $80,000, and Coburn made drawings of $18,000 while Webb made drawings of $24,000. Instructions: a. Assume the partnership income-sharing agreement calls for income to be divided 45% to Coburn and 55% to Webb. Prepare the journal entry to record the allocation of net income. b. Assume the partnership income-sharing agreement calls for income to be divided with a salary of $30,000 to Coburn and $25,000 to Webb, with the remainder divided 45% to Coburn and 55% to Webb. Prepare the journal entry to record the allocation of net income. c. Assume the partnership income-sharing agreement calls for income to be divided with a salary of $40,000 to Coburn and $35,000 to Webb, interest of 10% on beginning capital, and the remainder divided 50%–50%. 1. Prepare the journal entry to record the allocation of net income. 2. Prepare the entries to close…
A and B's partnership agreement provides for an annual salary allowance of 100,000 for A and 10% interest on the weighted average capital balance of B. The remainder is shared equally. During the period, the partnership earned profit of P200,000. B's capital account had a beginning balance of P120,000. B made additional investments of P60,000on March 1, P40,000 on Sept. 30, and made drawings of P30,000 on Aug. 1 and P9,000 on Nov. 1 Compute the respective shares of the partners in the profit
Rodgers and Winter had capital balances of $60,000 and $90,000, respectively, at the beginning of the current fiscal year. The articles of partnership provide for salary allowances of $25,000 and $30,000, respectively; an allowance of interest at 12% on the capital balances at the beginning of the year; and the remaining net income divided equally. Net income for the current year was $110,000. a. Present the Division of net income section of the income statement for the current year. excess allowance over net inome/remaining income Net income $110,000 Rodgers Winter Total Division of net income: Salary allowance $ $ $ Interest allowance Total Net income $ $ $ b. Assuming that the net income had been $65,000 instead of $110,000, present the Division of net income section of the income statement for the current year. excess allowance over net…

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