Keith Williams and Brian Adams were students when they formed a partnership several years ago for a part-time business called Music Works. Adjusted trial balance information for the year ended December 31, 2023, appears below. Account Accounts payable Accumulated depreciation Brian Adams, capital** Brian Adams, withdrawals Cash Equipment Expenses Balance* Account $ 11,100 Keith Williams, capital** Balance* $ 44,300 91,000 Keith Williams, withdrawals 66,000 38,000 76,000 Note payable, due May 2025*** Office supplies 152,000 32,000 227,200 332,000 Revenues Utilities payable 512,000 2,800 118,000 Assume all account balances are normal. **The partners made no investments during the year. ****$56,000 of the note payable is due in May 2024. Required: 1. Prepare calculations that show how the profit should be allocated to the partners assuming the partnership agreement states that profit/(losses) are to be shared by allowing a $106,000 per year salary allowance to Williams, a $166,000 per year salary allowance to Adams, and the remainder on a 3:2 ratio. (Leave no cell blank. Enter "O" when the answer is zero.) Profit Salary allowance Balance of profit to be allocated Balance allocated on a 3:2 ratio Balance of profit Shares of the partners Williams Adams Total 0 $ 0 0
Keith Williams and Brian Adams were students when they formed a partnership several years ago for a part-time business called Music Works. Adjusted trial balance information for the year ended December 31, 2023, appears below. Account Accounts payable Accumulated depreciation Brian Adams, capital** Brian Adams, withdrawals Cash Equipment Expenses Balance* Account $ 11,100 Keith Williams, capital** Balance* $ 44,300 91,000 Keith Williams, withdrawals 66,000 38,000 76,000 Note payable, due May 2025*** Office supplies 152,000 32,000 227,200 332,000 Revenues Utilities payable 512,000 2,800 118,000 Assume all account balances are normal. **The partners made no investments during the year. ****$56,000 of the note payable is due in May 2024. Required: 1. Prepare calculations that show how the profit should be allocated to the partners assuming the partnership agreement states that profit/(losses) are to be shared by allowing a $106,000 per year salary allowance to Williams, a $166,000 per year salary allowance to Adams, and the remainder on a 3:2 ratio. (Leave no cell blank. Enter "O" when the answer is zero.) Profit Salary allowance Balance of profit to be allocated Balance allocated on a 3:2 ratio Balance of profit Shares of the partners Williams Adams Total 0 $ 0 0
Chapter28: Income Taxati On Of Trusts And Estates
Section: Chapter Questions
Problem 8DQ
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Transcribed Image Text:Keith Williams and Brian Adams were students when they formed a partnership several years ago for a part-time business called Music
Works. Adjusted trial balance information for the year ended December 31, 2023, appears below.
Account
Accounts payable
Accumulated depreciation
Brian Adams, capital**
Brian Adams, withdrawals
Cash
Equipment
Expenses
Balance*
Account
$ 11,100
Keith Williams, capital**
Balance*
$ 44,300
91,000
Keith Williams, withdrawals
66,000
38,000
76,000
Note payable, due May 2025***
Office supplies
152,000
32,000
227,200
332,000
Revenues
Utilities payable
512,000
2,800
118,000
Assume all account balances are normal.
**The partners made no investments during the year.
****$56,000 of the note payable is due in May 2024.
Required:
1. Prepare calculations that show how the profit should be allocated to the partners assuming the partnership agreement states that
profit/(losses) are to be shared by allowing a $106,000 per year salary allowance to Williams, a $166,000 per year salary allowance to
Adams, and the remainder on a 3:2 ratio. (Leave no cell blank. Enter "O" when the answer is zero.)
Profit
Salary allowance
Balance of profit to be allocated
Balance allocated on a 3:2 ratio
Balance of profit
Shares of the partners
Williams
Adams
Total
0
$
0
0
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