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.)

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.)

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter15: Partnership Accounting

Section: Chapter Questions

Problem 2PA: Arun and Margot want to admit Tammy as a third partner for their partnership. Their capital balances...

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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 $26,000 and $18,000, 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 $59,000 and Dawn's is $43,000. Required: Prepare an income distribution schedule assuming the income of the partnership is (a) $90,000 and (b) $28,000. 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. (a) Distribution of $90,000 income: Profit percentage Average capital Net income Interest on average capital Salary Residual income (deficit) Allocate Total (b) Distribution of $28,000 income: Angela 70 % $ 26,000 Dawn 64,100 $ 102,200 30 % $18,000 $ 5,900 $ 4,300 32,200…
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