Kimble, Sykes, and Gerard open an accounting practice on January 1, 2019, in Chicago, Illinois, to be operated as a partnership. Kimble and Sykes will serve as the senior partners because of their years of experience. To establish the business, Kimble, Sykes, and Gerard contribute cash and other properties valued at $238,000, $195,000, and $107,000, respectively. An articles of partnership agreement is drawn up stipulating the following: . Personal drawings are allowed annually up to an amount equal to 10 percent of the partner's beginning capital balance for the year. Profits and losses are allocated according to the following plan: 1. Each partner receives an annual salary allowance of $55 per billable hours worked. 2. Interest is credited to the partners' capital accounts at the rate of 12 percent of the beginning capital balance for the year. 3. Kimble and Sykes are eligible for an annual bonus of 10 percent of net income after subtracting the bonus, salary allowance, and interest. The agreement also states that there will be no bonus if there is a net loss or if salary and interest result in a negative remainder of net income to be distributed. 4. Any remaining partnership profit or loss is to be divided evenly among all partners. On January 1, 2020, the partners admit Nichols to the partnership. Nichols contributes cash directly to the business in an amount equal to a 25 percent interest in the book value of the partnership property subsequent to this contribution. The partnership profit and loss sharing agreement is not altered upon Nichols' entrance into the firm; the general provisions continue to be applicable. The billable hours for the partners during the first three years of operation follow: 2019 2020 2021 Kimble 2,420 1,800 1,880 Sykes 2,160 1,500 1,620 Gerard 2,020 1,380 1,310 Nichols 0 1,560 1,550 The partnership reports net income (loss) for 2019 through 2021 as follows: 2019 $ 300,000 2020 2021 (14,200) 495,000 Each partner withdraws the maximum allowable amount each year. a. Prepare schedules that allocate each year's net income to the partners. b. Prepare in appropriate form a statement of partners' capital for the year ending December 31, 2021.

Kimble, Sykes, and Gerard open an accounting practice on January 1, 2022, in Chicago, Illinois, to be operated as a partnership. Kimble and Sykes will serve as the senior partners because of their years of experience. To establish the business, Kimble, Sykes, and Gerard contribute cash and other properties valued at $248,000, $200,000, and $112,000, respectively. An articles of partnership agreement is drawn up stipulating the following: Personal drawings are allowed annually up to an amount equal to 10 percent of the partner's beginning capital balance for the year. Profits and losses are allocated according to the following plan: Each partner receives an annual salary allowance of $55 per billable hours worked. Interest is credited to the partners’ capital accounts at the rate of 12 percent of the beginning capital balance for the year. Kimble and Sykes are eligible for an annual bonus of 10 percent of net income after subtracting the bonus, salary allowance, and interest. The…

Jennifer DeVine and Stanley Farrin decide to organize the ALL-Star partnership. DeVine invests $25,000 cash, and Farrin contributes $20,000 cash and equipment having a book value of $5,500. Prepare the entry to record Farrin’s and DeVine’s investment in the partnership, assuming the Ferrin’s equipment has a fair market value of $9,000

At the beginning of the current year, Cameron and Harold formed the CH Partnership by transferring cash and property to the partnership in exchange for a partnership interest, with each having a 50% interest. Specifically, Cameron transferred property having a $55,000 FMV, a $28,000 adjusted basis, and subject to a $13,000 liability, which the partnership assumed. Harold contributed $60,000 cash to the partnership. The partnership also borrowed $26,000 from the bank to use in its operations. All liabilities are recourse for which the partners have an equal economic risk of loss. During the current year, the partnership earned $27,000 of net ordinary income and reinvested this amount in new property. Read the requirements. Requirement a. What is the partnership's and each partner's gain or loss recognized on the formation of the partnership? (Complete all input fields. Enter a loss with a minus sign or parentheses. If no gain or loss is recognized by a partner or the partnership, enter…