Question 2Humber College Longo Faculty of BusinessTime recommended 25 Minutes10 Marksalent, a local HR consulting firm, has total partners' equity of $760,000, which is made up ofall, Capital, $600,000, and Reynolds, Capital, $160,000. The partners share profit/(losses) inratio of 75% to Hall and 25% to Reynolds. On July 1, Morris is admitted to the partnershipd given a 20% interest in equity.quired:pare the journal entry to record the admission of Morris under each of the followingelated assumptions, in which Morris invests cash of:1. $190,0002. $230,0003. $110,000Solution Question 2

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Answered: Question 2 Humber College Longo Faculty…

Financial Accounting: The Impact on Decision Makers

10th Edition

ISBN:9781305654174

Author:Gary A. Porter, Curtis L. Norton

Publisher:Gary A. Porter, Curtis L. Norton

Chapter11: Stockholders' Equity

Section: Chapter Questions

Problem 11.11AP

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2:19 O י 0ס 42 docs.google.com/forms Problem B: Operation GeeHan partnership begins its first year of operations with Gee, capital of 160,000 and Han capital of 80,000. According to the partnership agreement, all profits will be distributed as follows: a. Gee will be allowed a monthly salary of P10,000 b. The partners will be allowed with interest equal to 10% of the capital balance as of the first day of the year. c. Gee will be allowed a bonus of 10% of the net income after salaries. d. The remainder will be divided on the basis of 60:40 for the first year and 50:50 for the second year. Assume further, that the partnership generated Net Income of P320,000 for the first year and P200,000 for the second year. 4. What is the share of Han in the net income for the first year? Your answer 5. What is the share of Gee in the net income for the first year? Your answer 6. How much is the share of Han in the net income for the second year? Your answer 7. What is the share of Gee in the net…
Question No:1 Mr. Suhail and Mr. Said decided to start a partnership business. They drafted a partnership deed with the help of a consultant and started the business on 01.11.2020 Some of the key extracts of the partnership deed is given as follows: Resolved that. Each partner is to bring in OMR 15,000 as capital Each partner is to get 5% interest on capital Suhail is entitled to get a salary of OMR 400 per month Firm is entitled to charge 6% interest per annum on partner’s drawings. Summary of transactions: November: 2020 Capital contribution: Mr. Suhail –OMR 15000; Mr. Said: OMR 15000 Purchase of goods- OMR 8,000 Sales of goods- OMR 18,000 Wages- OMR 200 Salary to employees- OMR 1,200 Other administrative expenses- OMR 800 Rent of building- OMR 1,000 Electricity charges- OMR 15 Water charges- OMR 5 Travelling expenses- OMR 50 Furniture purchase- OMR 1,500 Electrical fittings- OMR 200 Drawings of partners-: Mr. Suhail –OMR 200; Mr. Said; OMR 150 Salary to Mr. Suhail-…
Homework Activity 2 AB and C are in partnership sharing profits and losses in the ratio of 3:2:1. On 1* Jan 2019, their В 20,000 capital balances are: A 30,000 C 10,000 The terms of partnership provides that a. All partners are eligible for interest on capital @6% b. All partners are liable to pay interest on drawings @ 4% c. All Partners are eligible for salary @ RO 200 per month The net profit for the year ended 31s* Dec 2019 before making the above terms was 18,000. The drawings of the partners were: A 3,000 B 2,000 C 1,000 You are requested to prepare I. Profit and Loss Appropriations Account II. Capital accounts of three partners under fluctuating capital method
Exercise 12-11 (Algo) Admission of new partner LO P3 The Struter Partnership has total partners' equity of $420,000, which is made up of Main, Capital, $294,000, and Frist, Capital, $126,000. The partners share net income and loss in a ratio of 72% to Main and 28% to Frist. On November 1, Adison is admitted to the partnership and given a 20% interest in equity and a 20% share in any income and loss. Prepare journal entries to record the admission of Adison for a 20% interest in the equity and a 20% share in any income and loss under independent assumption. (1) Record the admission of Adison with an investment of $105,000 for a 20% interest in the equity and a 20% share in any income and loss. (2) Record the admission of Adison with an investment of $140,000 for a 20% interest in the equity and a 20% share in any income and loss. (3) Record the admission of Adison with an investment of $75,000 for a 20% interest in the equity and a 20% share in any income and loss. No A B C Transaction…
SCORE: NAME: PROFESSOR: SECTION: Problem #15 Determining a New Partner's Investment Cost respectively. P150,000 Accounts Payable Morales, Capital Gamino, Capital Quito, Capital Total Liabilities and Capital 260,000 P 40,000 710,000 Cash 180,000 Other Assets 160,000 P750,000 Total Assets P750,000 Assume that the partnership decided to admit Abello as a new partner with a one. fourth interest. Required: For each of the following independent cases, determine the amount that Abello must contribute in cash or other assets: 1. No goodwill or bonus will be recorded. 2. A bonus of P24,000 is to be paid by Abello and allocated to the prior partners. 3. The partners agreed that total resulting capital should be P820,000 and no goodwill should be recognized. 4. Other assets are written down by P20,000 and a bonus of P40,000 is paid to Abello at the time of admission.
PROBLEM 13. Pixel and Quiel are partners operating a chain of retail stores. The partnership agreement provides for the following: Pixel Quiel Salaries P5,000 P2,500 Interest on capital balance 10% 10% Bonus 20% of net income before interest but after bonus and salaries Remainder 30% 70% The income summary account for the year shows a credit balance of P25,500 before any deductions. Average capital balances for Pixel and Quiel are P25,000 and P37,500 respectively. 25) The share of Pixel in the P25,500 net income would be:
Exercise 12- 11 (Algo) Admission of new partner LO P 3 The Struter Partnership has total partners' equity of $ 480,000, which is made up of Main, Capital, $336, 000, and Frist, Capital, $144, 000. The partners share net income and loss in a ratio of 84% to Main and 16 % to Frist. On November 1, Adison is admitted to the partnership and given a 20% interest in equity and a 20% share in any income and loss. Prepare journal entries to record the admission of Adison for a 20% interest in the equity and a 20% share in any income and loss under independent assumption. (1) Record the admission of Adison with an investment of $ 120,000 for a 20 % interest in the equity and a 20 % share in any income and loss. (2) Record the admission of Adison with an investment of $155,000 for a 20% interest in the equity and a 20 % share in any income and loss. (3) Record the admission of Adison with an investment of $90,000 for a 20% interest in the equity and a 20% share in any income and loss.Answer is…
E 16-7 Recording new partner investment The capital accounts of the Fax and Bel partnership on September 30, 2011, were: Fax capital (75% profit percentage) Bel capital (25% profit percentage) Total capital $140,000 60,000 $200,000 On October 1, Rob was admitted to a 40 percent interest in the partnership when he purchased 40 percent of each existing partner’s capital for $120,000, paid directly to Fax and Bel. REQUIRED 1. Determine the capital balances of Fax, Bel, and Rob after Rob’s admission to the partnership if goodwill is not recorded. 2. Determine the capital balances of Fax, Bel, and Rob after Rob’s admission to the partnership if goodwill is recorded, assuming that the book value and fair value of recorded assets are equal.
5. Distribution of Income for Partnerships Julia Green invested $125,000 and Michael Spencer invested $ 80,000 in forming a partnership company and the information to calculate their 2021 net income is as follows: a. Salary Allowances: Julia=3,000 monthly, Michael= 5,000 monthly b. Interest Allowance: 10% on investment c. Any remaining balance will be allocated on the investment ratio. d. 2021 net income- $ 300,000 Required 1. Calculate the 2021 income for each partner 2. Journal entry
Partner bonuses, statement of partnership equity The partnership of Angel Investor Associates began operations on January 1, 20Y5, with contributions from two partners as follows: Dennis Overton Ben Testerman $180,000 120,000 The following additional partner transactions took place during the year: 1. In early January, Randy Campbell is admitted to the partnership by contributing $75,000 cash for a 20% interest. 2. Net income of $150,000 was earned in 2015. In addition, Dennis Overton received a salary allowance of $40,000 for the year. The three partners agree to an income-sharing ratio equal to their capital balances after admitting Campbell. 3. The partners' withdrawals are equal to half of the increase in their capital balances from salary allowance and income. Prepare a statement of partnership equity for the year ended December 31, 2015. of an amount box does not require an eritry, leave it blank. Angel Investor Associates Statement of Partnership Equity For the Year Ended…
Question #2: Toto profit 56,000 The ABCD Partnership has the following balance sheet at January 1, 2012, prior to the admission of new partner, Eden. Cash and current assets Land Building and equipment Total $ 39,000 234,000 130,000 $ 403,000 Liabilities Adams, capital Barnes, capital Cordas, capital Davis, capital Total $ 52,000 26,000 52,000 117,000 156,000 $ 403,000 Eden contributed $124,000 in cash to the business to receive a 20% interest in the partnership. Goodwill was to be recorded. The four original partners shared all profits and losses equally. After Eden made his investment, what were the individual capital balances?
Admitting New Partner With Bonus Admitting New Partner With Bonus L. Bowers and V. Lipscomb are partners in Elegant Event Consultants. Bowers and Lipscomb share income equally. M. Ortiz will be admitted to the partnership. Prior to the admission, equipment was revalued downward by $20,000. The capital balances of each partner are $75,000 and $101,500, respectively, prior to the revaluation. Question Content Area a. Provide the journal entry for the asset revaluation. If an amount box does not require an entry, leave it blank.b. Provide the journal entry for Ortiz’s admission under the following independent situations: 1. Ortiz purchased a 20% interest for $34,000. If an amount box does not require an entry, leave it blank. 2. Ortiz purchased a 30% interest for $85,000. If an amount box does not require an entry, leave it blank.

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