FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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- Angel has a one-fourth and Brian has a three-fourths interest in a partnership that operates a toy manufacturing company. The partnership books disclose the following information for the current calendar year: Sales $235,000 Sales returns and allowances 10,000 Beginning Inventory 50,000 Purchases 50,000 Manufacturing cost of labor and supplies 105,000 Ending Inventory 61,000 Salaries 26,000 Guaranteed payments to partners($8,400/each) 16,800 Rent expense 17,000 Interest expense 550 Taxes expense 8,500 Bad debt expense 1,000 Repairs expense 3,000 Depreciation expense (tax depreciation) 2,470 Utilities expense 1,680 Net long-term capital gain (sold computer) 600 Compute the partnership ordinary income?arrow_forwardThe partnership agreement of Jones, King, and Lane provides for the annual allocation of the business's profit or loss in the following sequence: Jones, the managing partner, receives a bonus equal to 15 percent of the business’s profit. Each partner receives 14 percent interest on average capital investment. Any residual profit or loss is divided equally. The average capital investments for 2021 were as follows: Jones $ 100,000 King 200,000 Lane 300,000 The partnership earned $48,000 net income for 2021. Prepare a schedule showing how the 2021 net income should be allocated to the partners. (Loss amounts should be indicated with a minus sign.)arrow_forwardThe partnership of Keenan and Kludlow paid the following wages during this year: M. Keenan (partner) $80,500 S. Kludlow (partner) 71,500 N. Perry (supervisor) 56,500 T. Lee (factory worker) 38,400 R. Rolf (factory worker) 27,000 D. Broch (factory worker) 6,600 S. Ruiz (bookkeeper) 26,600 C. Rudolph (maintenance) 5,400 In addition, the partnership owed $250 to Rudolph for work he performed during December. However, payment for this work will not be made until January of the following year. The state unemployment tax rate for the company is 2.95% on the first $9,000 of each employee's earnings. Compute the following: Round your answers to the nearest cent. a. Net FUTA tax for the partnership for this year$fill in the blank 1 b. SUTA tax for this yeararrow_forward
- McGill and Smyth have capital balances on January 1 of $41,000 and $34,000, respectively. The partnership income-sharing agreement provides for (1) annual salaries of $25,000 for McGill and $17,000 for Smyth, (2) interest at 12% 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 $85,000. (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 DIVISION OF NET INCOME McGill Smyth $ Total $ Remaining income/ deficiency Total 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 account balance then enter with a negative sign preceding the number or parenthesis, e.g. -15,000, (15,000).) Salary allowance…arrow_forwardA Lululime fashion business partnership has agreed that half of the annual profit be distributed in proportion to each partner's investment in the partnership, and that the other half be distributed in proportion to the total number of hours that each partner worked in the business during the year. In 2020 the profit of the company was $82,780. How the company should allocated this profit to its three investors if the amounts invested by Howe, Denver, and Laura are $68,000, $27,000, and $43,000, and their hours of work for the year were 420, 1170, and 1230, respectively?arrow_forward9. JJ&T Partnership has three partners, James Small, Josh Platt, and Turner Lyle, who allocate net income according to the services provided and any remainder equally. The partnership agreement states that James and Turner will provide services for $2,500 a month while Josh will provide services for $3,750. For the fiscal year ending December 31, 2015, the partnership earned $192,600. Determine the amount allocated to each partner and prepare the journal entry to record the division of net income.arrow_forward
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