Concept explainers
The
Dennis Overton $180,000
Ben Testerman 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 20Y5. 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, 20Y5.
Trending nowThis is a popular solution!
Step by stepSolved in 4 steps with 4 images
- Faith Busby and Jeremy Beatty started the B&B partnership on January 1, Year 1. The business acquired $93,000 cash from Busby and $207,000 from Beatty. During Year 1, the partnership earned $62,900 in cash revenues and paid $34,050 for cash expenses. Busby withdrew $2,900 cash from the business, and Beatty withdrew $4,700 cash. The net income was allocated to the capital accounts of the two partners in proportion to the amounts of their original investments in the business. Required Prepare an income statement, capital statement (statement of changes in equity),arrow_forwardOn January 2, Y1, Arch and Bean contribute $10,000 cash each to form Partnership. Arch and Bean share profits and losses in a ratio of 50% to 50%, respectively. For Y1, the partnership's ordinary income was $40,000. In addition JK Partnership took out a loan for $20,000 and a distribution of $5,000 was made to Arch during Y1. What is Arch's basis in JK Partnership at the end of Y1? $25,000. $5,000. $35,000. O $15,000.arrow_forwardFaith Busby and Jeremy Beatty started the B&B partnership on January 1, Year 1. The business acquired $101,500 cash from Busby and $188,500 from Beatty. During Year 1, the partnership earned $62,500 in cash revenues and paid $35,200 for cash expenses. Busby withdrew $2,300 cash from the business, and Beatty withdrew $5,300 cash. The net income was allocated to the capital accounts of the two partners in proportion to the amounts of their original investments in the business. Required Prepare an income statement, capital statement (statement of changes in equity), balance sheet, and statement of cash flows for B&B's Year 1 fiscal year. Complete this question by entering your answers in the tabs below. Income Statement Assets Cash Capital Statement Prepare a balance sheet. Note: Do not round intermediate calculations and round your final answer to the nearest whole dollar amount. Total assets Liabilities Equity F. Busby, Capital J. Beatty, Capital Balance Sheet Statement of Cash Flows…arrow_forward
- 2arrow_forwardPartner 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 $82,080 Ben Testerman 24,320 The following additional partner transactions took place during the year: 1. In early January, Randy Campbell is admitted to the partnership by contributing $45,600 cash for a 30% interest. 2. Net income of $190,000 was earned in 20Y5. 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, 20Y5. If an amount box does not require an entry, leave it blank. Angel Investor Associates Statement of Partnership Equity For the Year Ended December…arrow_forwardFaith Busby and Jeremy Beatty started the B&B partnership on January 1, Year 1. The business acquired $109,200 cash from Busby and $170,800 from Beatty. During Year 1, the partnership earned $67,500 in cash revenues and paid $27,350 for cash expenses. Busby withdrew $1,900 cash from the business, and Beatty withdrew $4,000 cash. The net income was allocated to the capital accounts of the two partners in proportion to the amounts of their original investments in the business. Required Prepare an income statement, capital statement (statement of changes in equity), balance sheet, and statement of cash flows for B&B's Year 1 fiscal year. Complete this question by entering your answers in the tabs below. Income Capital Statement Statement Balance Sheet Prepare a balance sheet. (Do not round intermediate calculations and round your final answer to the nearest whole dollar amount.) Assets Cash Stmt of Cash Flows Total assets Liabilities B&B PARTNERSHIP Balance Sheet As of December 31, Year 1…arrow_forward
- The partnership of Angel Investor Associates began operations on January 1, 20Y5, with contributions from two partners as follows: Dennis Overton $180,000 Ben Testerman 120,000 The following additional partner transactions took place during the year: In early January, Randy Campbell is admitted to the partnership by contributing $75,000 cash for a 20% interest. 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. 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, 20Y5.arrow_forwardNicholas and Sarah began a partnership by investing $52,000 and $78,000. During the first year running, it had net income $180,000 A. allocation based on no agreement B. allocation based on partner initial investment C. allocation based on partnership conditions Nicholas Sarah 1) salary allowance 85000 65000 2) Interest allowance 10%on initial investment 3) split rest of balance equallyarrow_forward9. JJ&T Partnership has three partners, James Small, Josh Platt, and Turner Lyle, who allocate net income according to the services provided and any remainder equally. The partnership agreement states that James and Turner will provide services for $2,500 a month while Josh will provide services for $3,750. For the fiscal year ending December 31, 2015, the partnership earned $192,600. Determine the amount allocated to each partner and prepare the journal entry to record the division of net income.arrow_forward
- AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
- Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSONIntermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill EducationFinancial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education