Ramer and Knox
Chapter21: Partnerships
Section: Chapter Questions
Problem 2BCRQ
Related questions
Question
![Required information
[The following information applies to the questions displayed below.]
Ramer and Knox began a partnership by investing $58,000 and $87,000, respectively. During its first year, the partnership
earned $180,000. Prepare calculations showing how the $180,000 income is allocated under each separate plan for
sharing income and loss.
3. The partners agreed to share income by giving a $54,000 per year salary allowance to Ramer, a $44,000 per year salary allowance
to Knox, 10% interest on their initial capital investments, and the remaining balance shared equally. Net income is $180,000.
Note: Enter all allowances as positive values. Enter losses as negative values.
Net Income
Salary allowances
Interest allowances
Total salary and interest
Balance of income
Balance allocated equally
Balance of income
Shares of the partners
Ramer
Knox
Total](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb557e603-8c72-465c-987e-c9e0f13d6892%2F1619c8bf-edb0-440f-bf50-f335e9ae0a68%2F0hym58_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Required information
[The following information applies to the questions displayed below.]
Ramer and Knox began a partnership by investing $58,000 and $87,000, respectively. During its first year, the partnership
earned $180,000. Prepare calculations showing how the $180,000 income is allocated under each separate plan for
sharing income and loss.
3. The partners agreed to share income by giving a $54,000 per year salary allowance to Ramer, a $44,000 per year salary allowance
to Knox, 10% interest on their initial capital investments, and the remaining balance shared equally. Net income is $180,000.
Note: Enter all allowances as positive values. Enter losses as negative values.
Net Income
Salary allowances
Interest allowances
Total salary and interest
Balance of income
Balance allocated equally
Balance of income
Shares of the partners
Ramer
Knox
Total
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps
Recommended textbooks for you
Financial Accounting
Accounting
ISBN:
9781305088436
Author:
Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:
Cengage Learning
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College