Ramer and Knox began a partnership by investing $71,000 and $101,000, respectively. The partners agreed to share net income and loss by giving annual salary allowances of $55,500 to Ramer and $44,400 to Knox, 10% interest allowances on their investments, and any remaining balance shared equally. Note: Enter all allowances as positive values. Enter losses as negative values. Required: 1. Determine each partner's share given a first-year net income of $109,800. 2. Determine each partner's share given a first-year net loss of $27,800 Complete this question by entering your answers in the tabs below. Required 1 Required 2 Determine each partner's share given a first-year net loss of $27,800. Allocation of Partnership Income Ramer Knox Net Income (loss) Salary allowances Balance of income (loss) Interest allowances Balance of income (loss) Balance allocated equally Balance of income (loss) Shares of the partners < Required 1 Total $ (27,800) 0 0 0
Ramer and Knox began a partnership by investing $71,000 and $101,000, respectively. The partners agreed to share net income and loss by giving annual salary allowances of $55,500 to Ramer and $44,400 to Knox, 10% interest allowances on their investments, and any remaining balance shared equally. Note: Enter all allowances as positive values. Enter losses as negative values. Required: 1. Determine each partner's share given a first-year net income of $109,800. 2. Determine each partner's share given a first-year net loss of $27,800 Complete this question by entering your answers in the tabs below. Required 1 Required 2 Determine each partner's share given a first-year net loss of $27,800. Allocation of Partnership Income Ramer Knox Net Income (loss) Salary allowances Balance of income (loss) Interest allowances Balance of income (loss) Balance allocated equally Balance of income (loss) Shares of the partners < Required 1 Total $ (27,800) 0 0 0
College Accounting, Chapters 1-27
23rd Edition
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:HEINTZ, James A.
Chapter19: Accounting For Partnerships
Section: Chapter Questions
Problem 2SEB
Related questions
Concept explainers
Partnership Accounting
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings, admission of a new partner, etc.
Partner Admission and Withdrawal
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings of a partner, etc.
Question
Transcribed Image Text:Exercise 12-6 (Algo) Income allocation in a partnership LO P2
Ramer and Knox began a partnership by investing $71,000 and $101,000, respectively. The partners agreed to share net income and
loss by giving annual salary allowances of $55,500 to Ramer and $44,400 to Knox, 10% interest allowances on their investments, and
any remaining balance shared equally.
Note: Enter all allowances as positive values. Enter losses as negative values.
ces
Required:
1. Determine each partner's share given a first-year net income of $109,800
2. Determine each partner's share given a first-year net loss of $27,800.
Complete this question by entering your answers in the tabs below.
Required 1 Required 2
Determine each partner's share given a first-year net loss of $27,800.
Allocation of Partnership Income
Ramer
Knox
Net Income (loss)
Salary allowances
Balance of income (loss)
Interest allowances
Balance of income (loss)
Balance allocated equally
Balance of income (loss)
Shares of the partners
< Required 1
$
Total
(27,800)
0
0
0
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