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On January 1, 2020, the dental partnership of Angela, Diaz, and Krause was formed when the partners contributed $36,000, $64,000, and $66,000, respectively. Over the next three years, the business reported net income and (loss) as follows: 2020 $ 76,000 2021 48,000 2022 (31,000 ) During this period, each partner withdrew cash of $17,000 per year. Krause invested an additional $8,000 in cash on February 9, 2021. At the time that the partnership was created, the three partners agreed to allocate all profits and losses according to a specified plan written as follows: Each partner is entitled to interest computed at the rate of 10 percent per year based on the individual capital balances at the beginning of that year. Because of prior work experience, Angela is entitled to an annual salary allowance of $15,000 per year, and Diaz is entitled to an annual salary allowance of $9,600 per year. Any remaining profit will be split as follows: Angela, 20 percent; Diaz, 40 percent; and Krause, 40 percent. If a net loss remains after the initial allocations to the partners, the balance will be allocated: Angela, 30 percent; Diaz, 50 percent; and Krause, 20 percent. Prepare a schedule that determines the ending capital balance for each partner as of the end of each of these three years

On January 1, 2020, the dental partnership of Angela, Diaz, and Krause was formed when the partners contributed $36,000, $64,000, and $66,000, respectively. Over the next three years, the business reported net income and (loss) as follows: 2020 $ 76,000 2021 48,000 2022 (31,000 ) During this period, each partner withdrew cash of $17,000 per year. Krause invested an additional $8,000 in cash on February 9, 2021. At the time that the partnership was created, the three partners agreed to allocate all profits and losses according to a specified plan written as follows: Each partner is entitled to interest computed at the rate of 10 percent per year based on the individual capital balances at the beginning of that year. Because of prior work experience, Angela is entitled to an annual salary allowance of $15,000 per year, and Diaz is entitled to an annual salary allowance of $9,600 per year. Any remaining profit will be split as follows: Angela, 20 percent; Diaz, 40 percent; and Krause, 40 percent. If a net loss remains after the initial allocations to the partners, the balance will be allocated: Angela, 30 percent; Diaz, 50 percent; and Krause, 20 percent. Prepare a schedule that determines the ending capital balance for each partner as of the end of each of these three years

SWFT Individual Income Taxes
SWFT Individual Income Taxes
43rd Edition
ISBN:9780357391365
Author:YOUNG
Publisher:YOUNG
Chapter20: Corporations And Parterships
Section: Chapter Questions
Problem 57P
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On January 1, 2020, the dental partnership of Angela, Diaz, and Krause was formed when the partners contributed $36,000, $64,000, and $66,000, respectively. Over the next three years, the business reported net income and (loss) as follows: 2020 $ 76,000 48,000 (31,000 ) 2021 2022 During this period, each partner withdrew cash of $17,000 per year. Krause invested an additional $8,000 in cash on February 9, 2021. At the time that the partnership was created, the three partners agreed to allocate all profits and losses according to a specified plan written as follows: Each partner is entitled to interest computed at the rate of 10 percent per year based on the individual capital balances at the beginning of that year. Because of prior work experience, Angela is entitled to an annual salary allowance of $15,000 per year, and Diaz is entitled to an annual salary allowance of $9,600 per year. Any remaining profit will be split as follows: Angela, 20 percent; Diaz, 40 percent; and Krause, 40 percent. If a net loss remains after the initial allocations to the partners, the balance will be allocated: Angela, 30 percent; Diaz, 50 percent; and Krause, 20 percent. Prepare a schedule that determines the ending capital balance for each partner as of the end of each of these three years.
Transcribed Image Text:On January 1, 2020, the dental partnership of Angela, Diaz, and Krause was formed when the partners contributed $36,000, $64,000, and $66,000, respectively. Over the next three years, the business reported net income and (loss) as follows: 2020 $ 76,000 48,000 (31,000 ) 2021 2022 During this period, each partner withdrew cash of $17,000 per year. Krause invested an additional $8,000 in cash on February 9, 2021. At the time that the partnership was created, the three partners agreed to allocate all profits and losses according to a specified plan written as follows: Each partner is entitled to interest computed at the rate of 10 percent per year based on the individual capital balances at the beginning of that year. Because of prior work experience, Angela is entitled to an annual salary allowance of $15,000 per year, and Diaz is entitled to an annual salary allowance of $9,600 per year. Any remaining profit will be split as follows: Angela, 20 percent; Diaz, 40 percent; and Krause, 40 percent. If a net loss remains after the initial allocations to the partners, the balance will be allocated: Angela, 30 percent; Diaz, 50 percent; and Krause, 20 percent. Prepare a schedule that determines the ending capital balance for each partner as of the end of each of these three years.
Ending Capital Ending Capital Ending Capital Balance 2020 Balance 2021 Balance 2022 Prepare a schedule that determines the ending capital balance for each partner as of the er deducted should be indicated with minus sign.) Beginning balances Net income allocation Drawings Ending balances Ending Capital Ending Capital Ending Capital Balance 2020 Balance 2021 Balance 2022 Beginning balances Additional investment Net income allocation Drawings Ending balances ANGELA, DIAZ, and KRAUSE Statement of Partners' Capital For the Year Ending December 31, 2020 Angela Diaz $ Beginning balances Income allocation Drawings Ending balances 0 $ Prepare a schedule that determines the ending capital balance for each partner as of the er deducted should be indicated with minus sign.) $ ANGELA, DIAZ, and KRAUSE Statement of Partners' Capital For the Year Ending December 31, 2021 Angela Diaz Ending Capital Ending Capital Ending Capital Balance 2020 Balance 2021 Balance 2022 0 $ < Ending Capital Balance 2020 0 $ $ ANGELA, DIAZ and KRAUSE Statement of Partners' Capital 0 $ 0 $ For the Year Ending December 31, 2022 Angela Diaz Krause Krause 0 $ 0 $ $ Prepare a schedule that determines the ending capital balance for each partner as of the deducted should be indicated with minus sign. Do not round intermediate calculations. R dollar amounts.) Krause $ $ Total Total $ 0 $ Ending Capital Balance 20 0 0 0 0 0 0 0 Total 0 0 0 0 0 0
Transcribed Image Text:Ending Capital Ending Capital Ending Capital Balance 2020 Balance 2021 Balance 2022 Prepare a schedule that determines the ending capital balance for each partner as of the er deducted should be indicated with minus sign.) Beginning balances Net income allocation Drawings Ending balances Ending Capital Ending Capital Ending Capital Balance 2020 Balance 2021 Balance 2022 Beginning balances Additional investment Net income allocation Drawings Ending balances ANGELA, DIAZ, and KRAUSE Statement of Partners' Capital For the Year Ending December 31, 2020 Angela Diaz $ Beginning balances Income allocation Drawings Ending balances 0 $ Prepare a schedule that determines the ending capital balance for each partner as of the er deducted should be indicated with minus sign.) $ ANGELA, DIAZ, and KRAUSE Statement of Partners' Capital For the Year Ending December 31, 2021 Angela Diaz Ending Capital Ending Capital Ending Capital Balance 2020 Balance 2021 Balance 2022 0 $ < Ending Capital Balance 2020 0 $ $ ANGELA, DIAZ and KRAUSE Statement of Partners' Capital 0 $ 0 $ For the Year Ending December 31, 2022 Angela Diaz Krause Krause 0 $ 0 $ $ Prepare a schedule that determines the ending capital balance for each partner as of the deducted should be indicated with minus sign. Do not round intermediate calculations. R dollar amounts.) Krause $ $ Total Total $ 0 $ Ending Capital Balance 20 0 0 0 0 0 0 0 Total 0 0 0 0 0 0
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