Accounting, Chapters 1-13
27th Edition
ISBN: 9781337272100
Author: Carl Warren, James M. Reeve, Jonathan Duchac
Publisher: Cengage Learning
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Chapter 12, Problem 12.4EX
To determine
It is that form of organization which is owned and managed by two or more persons who invest and share the
To determine: The participation of partners in the net income of the year under various independent assumptions.
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Coburn (beginning capital, $60,000) and Webb (beginning capital $86,000) are partners. During 2022, the partnership earned net
income of $74,000, and Coburn made drawings of $20,000 while Webb made drawings of $22,000.
Assume the partnership income-sharing agreement calls for income to be divided with a salary of $41,000 to Coburn and
$36,000 to Webb, interest of 10% on beginning capital, and the remainder divided 50%-50%. Prepare the journal entry to record
the allocation of net income. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Account Titles and Explanation
Income Summary
Coburn, Capital
Webb, Capital
Debit
68000
Credit
33850
32150
Assume the partnership income-sharing agreement calls for income to be divided with a salary of $30,000 to Coburn and
$25,000 to Webb, with the remainder divided 35% to Coburn and 65% to Webb. Prepare the journal entry to record the
allocation of net income. (Credit account titles are automatically indented when amount is entered. Do not indent
manually.)
Account Titles and Explanation
>
Debit
Credit
Chapter 12 Solutions
Accounting, Chapters 1-13
Ch. 12 - Prob. 1DQCh. 12 - Prob. 2DQCh. 12 - Prob. 3DQCh. 12 - Prob. 4DQCh. 12 - Prob. 5DQCh. 12 - Prob. 6DQCh. 12 - Prob. 7DQCh. 12 - Prob. 8DQCh. 12 - Prob. 9DQCh. 12 - Prob. 10DQ
Ch. 12 - Prob. 12.1APECh. 12 - Prob. 12.1BPECh. 12 - Prob. 12.2APECh. 12 - Prob. 12.2BPECh. 12 - Prob. 12.3APECh. 12 - Prob. 12.3BPECh. 12 - Prob. 12.4APECh. 12 - Prob. 12.4BPECh. 12 - Liquidating partnerships Prior to liquidating...Ch. 12 - Prob. 12.5BPECh. 12 - Prob. 12.6APECh. 12 - Prob. 12.6BPECh. 12 - Revenue per employee Niles and Cohen, CPAs earned ...Ch. 12 - Prob. 12.7BPECh. 12 - Prob. 12.1EXCh. 12 - Prob. 12.2EXCh. 12 - Prob. 12.3EXCh. 12 - Prob. 12.4EXCh. 12 - Prob. 12.5EXCh. 12 - Prob. 12.6EXCh. 12 - Prob. 12.7EXCh. 12 - LLC net income and statement of members equity...Ch. 12 - Prob. 12.9EXCh. 12 - Prob. 12.10EXCh. 12 - Prob. 12.11EXCh. 12 - Prob. 12.12EXCh. 12 - Prob. 12.13EXCh. 12 - Prob. 12.14EXCh. 12 - Prob. 12.15EXCh. 12 - Prob. 12.16EXCh. 12 - Statement of members' equity, admitting new member...Ch. 12 - Distribution of cash upon liquidation Hewitt and...Ch. 12 - Distribution of cash upon liquidation David Oliver...Ch. 12 - Prob. 12.20EXCh. 12 - Prob. 12.21EXCh. 12 - Liquidating partnershipscapital deficiency...Ch. 12 - Prob. 12.23EXCh. 12 - Prob. 12.24EXCh. 12 - Prob. 12.25EXCh. 12 - Revenue per professional staff The accounting firm...Ch. 12 - Revenue per employee Superior Cleaning Services,...Ch. 12 - Prob. 12.1APRCh. 12 - Prob. 12.2APRCh. 12 - Prob. 12.3APRCh. 12 - Prob. 12.4APRCh. 12 - Prob. 12.5APRCh. 12 - Prob. 12.6APRCh. 12 - Prob. 12.1BPRCh. 12 - Prob. 12.2BPRCh. 12 - Prob. 12.3BPRCh. 12 - Prob. 12.4BPRCh. 12 - Prob. 12.5BPRCh. 12 - Statement of partnership liquidation On August 3,...Ch. 12 - Prob. 12.1CPCh. 12 - Prob. 12.3CPCh. 12 - Prob. 12.4CP
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- Problem 1. Alucard and Chou organized their partnership on 01/01/19. The following entries were made into their capital accounts during 2019. Required: If partnership profits for the year equaled P66,000, indicate the allocations between the partners under the following independent profit-sharing allocation conditions: Interest of 10% is allocated on weighted average capital balance and the remainder is divided equally. A salary of P9,000 will be allocated to Chou; 10% interest on ending capital is allocated to the partners; remainder is divided 60/40 to Alucard and Chou, respectively. Salaries are allocated to Alucard and Chou in the amount of P10,000 and P15,000, respectively and the remainder is allocated in the proportion to weighted average capital balances. A bonus of 10% of partnership profits after bonus is credited to Alucard, a salary of P35,000 is allocated to Chou, a P20,000 salary is allocated to Alucard, 10% interest on weighted capital is allocated, and remainder is…arrow_forwardWhich of the following will increase the current assets of a partnership at the end of a financial year? O A. Rent income owed for the current financial year; Insurance premium paid for the next financial year, Commission income received in advance OB. Rent income owed for the current financial year; Insurance premium paid for the next financial year, Account of a debtor written off O C. Rent income owed for the current financial year; Insurance premium paid for the next financial year; A financial asset that is due to mature in the next financial year O D. Insurance premium paid for the next financial year; A financial asset that is due to mature in the next financial year; Increase in provision for bad debtsarrow_forwardThe ledger of Tyler Lambert and Jayla Yost, attorneys-at-law, contains the following accounts and balances after adjustments have been recorded on December 31, 20Y3: Lambert and Yost Trial Balance December 31, 20Y3 Debit Balances Credit Balances Cash 34,000 Accounts Receivable 47,800 Supplies 2,000 Land 120,000 Building Accumulated Depreciation-Building Office Equipment Accumulated Depreciation-Office Equipment Accounts Payable Salaries Payable Tyler Lambert, Capital Tyler Lambert, Drawing Jayla Yost, Capital Jayla Yost, Drawing 157,500 67,200 63,600 21,700 27,900 5,100 135,000 50,000 88,000 60,000 Professional Fees 395,300 Salary Expense Depreciation Expense-Building 154,500 15,700 Property Tax Expense 12,000 Heating and Lighting Expense Supplies Expense Depreciation Expense-Office Equipment Miscellaneous Expense 8,500 6,000 5,000 3,600 740,200 740,200 The balance in Yost's capital account includes an additional investment of $10,000 made on April 10, 2OY3. (Continued)arrow_forward
- Assume that partners A and B share all profits and losses in the ratio of 3:2. Partner B has $100,000 credited to her Partnership Capital account when net income is allocated at year‐end. The amount of partnership net income for the year is ??? Why is the answer = $250,000?arrow_forwardPLEASE ANSWER ALL THE FOLLOWING QUESTIONS 1. Seth and Beth have original investments of $50,000 and $100,000, respectively, in a partnership. The articles of partnership include the following provisions regarding the division of net income: interest on original investment at 10%; salary allowances of $27,000 and $18,000, respectively; and the remainder to be divided equally. How much of the net income of $42,000 is allocated to Seth? a.$32,000 b.$23,000 c.$20,000 d.$0 2. Tucker and Titus are partners who share income in the ratio of 3:1 (3/4 to Tucker and 1/4 to Titus). Their capital balances are $31,500 and $61,000, respectively. The partnership generated net income of $48,000 for the year. What is Tucker's capital balance after closing the revenue and expense accounts to the capital accounts? a.$67,500 b.$81,000 c.$40,500 d.$54,000 3. Xavier and Yolanda have original investments of $50,000 and $100,000, respectively, in a partnership. The articles of partnership include the…arrow_forwardSeth and Beth have original investments of $50,000 and $100,000, respectively, in a partnership. The articles of partnership include the following provisions regarding the division of net income: interest on original investment at 10%; salary allowances of $27,000 and $18,000, respectively; and the remainder to be divided equally. How much of the net income of $42,000 is allocated to Seth? Oa. $0 Ob. $20,000 Oc. $32,000 Od. $23,000arrow_forward
- L&J Interests is a partnership with two equal partners, Linda and Joanne. The partnership has income for the year of $44,400 before guaranteed payments. Guaranteed payments of $26,640 are paid to Linda during the year. Calculate the amount of income that should be reported by Linda and Joanne from the partnership for the year. Linda should report income of: $ Joanne should report income of: $arrow_forward1. Seth and Rachel have original investments of $50,000 and $100,000, respectively, in a partnership. The articles of partnership include the following provisions regarding the division of net income: interest on original investments at 15%; salary allowances of $24,000 and $20,000, respectively; and the remainder to be divided equally. How much of the net income of $90,000 is allocated to Seth? a.$47,750 b.$45,000 c.$42,750 d.$43,250 2. Seth and Beth have original investments of $50,000 and $100,000, respectively, in a partnership. The articles of partnership include the following provisions regarding the division of net income: interest on original investment at 10%; salary allowances of $27,000 and $18,000, respectively; and the remainder to be divided equally. How much of the net income of $42,000 is allocated to Seth? a.$32,000 b.$23,000 c.$20,000 d.$0 3. Tucker and Titus are partners who share income in the ratio of 3:1 (3/4 to Tucker and 1/4 to Titus). Their capital…arrow_forwardXales and Yolanda have original investments of $45,500 and $110,000, respectively, in a partnership. The articles of partnership include the following provisions regard division of net income: interest of onginal investment at 20%; salary allowances of $28,400 and $29,200, respectively, and the remainder to be divided equally. How much net income of $109,700 is allocated to Yolanda? a. $51,200 b. $61,700 c. $22,000 d. $78,040arrow_forward
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