Principles of Financial Accounting.
24th Edition
ISBN: 9781260158601
Author: Wild
Publisher: MCG
expand_more
expand_more
format_list_bulleted
Question
Chapter 12, Problem 5E
To determine
Prepare calculations showing the manner in which the $160,000 income is allocated under each separate plan for sharing income and loss.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Ramer and Knox began a partnership by investing $60,000 and $90,000, respectively. During its first year, the partnership earned $160,000. Prepare calculations showing how the $160,000 income is allocated under each separate plan for sharing income and loss. 1. The partners did not agree on a plan and therefore share income equally. 2. The partners agreed to share income and loss in proportion to their initial investments. 3. The partners agreed to share income by giving a $50,000 per year salary allowance to Ramer, a $40,000 per year salary allowance to Knox, 10% interest on their initial capital investments, and the remaining balance shared equally.
Cosmo and Ellis began a partnership by investing $40,000 and $51,000, respectively. During its first year, the partnership earned $185,000. Prepare calculations showing how the $185,000 income should be allocated to the partners under each of the following three separate plans for sharing income and loss:
(1) The partners failed to agree on a method to share income.
(2) The partners agreed to share income and loss in proportion to their initial investments.
(3) The partners agreed to share income by granting a $52,500 per year salary allowance to Cosmo, a $42,500 per year salary allowance to Ellis, 20% interest on their initial capital investments, and the remaining balance shared equally.
Cosmo and Ellis began a partnership by investing $50,000 and $75,000, respectively. During its first year, the partnership earned $165,000. Prepare calculations showing how the $165,000 income should be allocated to the partners under each of the following three separate plans for sharing income and loss: (1) the partners failed to agree on a method to share income;
(2) the partners agreed to share income and loss in proportion to their initial investments (round amounts to the nearest dollar); and
(3) the partners agreed to share income by granting a $55,000 per year salary allowance to Cosmo, a $45,000 per year salary allowance to Ellis, 10% interest on their initial capital investments, and the remaining balance shared equally
Chapter 12 Solutions
Principles of Financial Accounting.
Ch. 12 - Prob. 1MCQCh. 12 - Prob. 2MCQCh. 12 - Prob. 3MCQCh. 12 - Prob. 4MCQCh. 12 - Prob. 5MCQCh. 12 - Prob. 1DQCh. 12 - Prob. 2DQCh. 12 - Prob. 3DQCh. 12 - Prob. 4DQCh. 12 - Prob. 5DQ
Ch. 12 - Prob. 6DQCh. 12 - Prob. 7DQCh. 12 - Prob. 8DQCh. 12 - Prob. 9DQCh. 12 - Prob. 10DQCh. 12 - Prob. 11DQCh. 12 - Prob. 12DQCh. 12 - Prob. 1QSCh. 12 - Prob. 2QSCh. 12 - Prob. 3QSCh. 12 - Prob. 4QSCh. 12 - Prob. 5QSCh. 12 - Prob. 6QSCh. 12 - Prob. 7QSCh. 12 - Prob. 8QSCh. 12 - The Field, Brown Snow partnership was begun with...Ch. 12 - Prob. 10QSCh. 12 - Determine whether each characteristic describes a...Ch. 12 - For each separate case, indicate which type of...Ch. 12 - Prob. 3ECh. 12 - Prob. 4ECh. 12 - Prob. 5ECh. 12 - Prob. 6ECh. 12 - Prob. 7ECh. 12 - Prob. 8ECh. 12 - Prob. 9ECh. 12 - Prob. 10ECh. 12 - Prob. 11ECh. 12 - Prob. 12ECh. 12 - Prob. 13ECh. 12 - Prob. 14ECh. 12 - Prob. 15ECh. 12 - Prob. 1APCh. 12 - Prob. 2APCh. 12 - Prob. 3APCh. 12 - Prob. 4APCh. 12 - Prob. 5APCh. 12 - Prob. 6APCh. 12 - Prob. 1BPCh. 12 - Prob. 2BPCh. 12 - Prob. 3BPCh. 12 - Prob. 4BPCh. 12 - Prob. 5BPCh. 12 - Prob. 6BPCh. 12 - Prob. 12SPCh. 12 - Prob. 1AACh. 12 - Prob. 2AACh. 12 - Review Samsungs 1938 to 1970 history at...Ch. 12 - Prob. 1BTNCh. 12 - Prob. 2BTNCh. 12 - Prob. 3BTNCh. 12 - Prob. 5BTN
Knowledge Booster
Similar questions
- The partnership of Tatum and Brook shares profits and losses in a 60:40 ratio respectively after Tatum receives a 10,000 salary and Brook receives a 15,000 salary. Prepare a schedule showing how the profit and loss should be divided, assuming the profit or loss for the year is: A. $40,000 B. $25,000 C. ($5,000) In addition, show the resulting entries to each partners capital account. Tatums capital account balance is $50,000 and Brooks is $60,000.arrow_forwardThe partnership of Magda and Sue shares profits and losses in a 50:50 ratio after Mary receives a $7,000 salary and Sue receives a $6,500 salary. Prepare a schedule showing how the profit and loss should be divided, assuming the profit or loss for the year is: A. $10,000 B. $5,000 C. ($12,000) In addition, show the resulting entries to each partners capital account.arrow_forwardThe partnership of Tasha and Bill shares profits and losses in a 50:50 ratio, and the partners have capital balances of $45,000 each. Prepare a schedule showing how the bonus should be divided if Ashanti joins the partnership with a $60,000 investment. The partners new agreement will share profit and loss in a 1:3 ratio.arrow_forward
- Arun and Margot want to admit Tammy as a third partner for their partnership. Their capital balances prior to Tammys admission are $50,000 each. Prepare a schedule showing how the bonus should be divided among the three, assuming the profit or loss agreement will be 1:3 once Tammy has been admitted and her contribution is: A. $20,000 B. $80,000 C. $50,000. In addition, show the resulting journal entries to each of the three partners capital accounts.arrow_forwardThe partnership of Michelle, Amal, and Maureen has done well. The three partners have shared profits and losses in a 1:3 ratio, with capital balances of $60,000 each. Maureen wants to retire and withdraw. Prepare a schedule showing how the cost should be divided if Amal and Michelle decide to pay Maureen $70,000 for retirement of her capital account and the new agreement will share profits and losses 50:50.arrow_forwardRamer and Knox began a partnership by Investing $62,000 and $93,000, respectively. During its first year, the partnership earned $190,000. Prepare calculations showing how the $190,000 income is allocated under each separate plan for sharing income and loss. 2. The partners agreed to share income and loss in proportion to their initial investments. Net income is $190,000. Note: Do not round intermediate calculations. Fraction to Allocate Ramer Ramer's Share of Income Fraction to Allocate Knox Knox's Share of Income Total Income Allocated $ 0arrow_forward
- Dallas and Weiss formed a partnership to manage rental properties, by investing $138,000 and $162,000, respectively. During its first year, the partnership recorded profit of $413,000.Required:Prepare calculations showing how the profit should be allocated to the partners under each of the following plans for sharing profit and losses: a. The partners failed to agree on a method of sharing profit. b. The partners agreed to share profits and losses in proportion to their initial investments. c. The partners agreed to share profit by allowing a $145,000 per year salary allowance to Dallas, an $75,000 per year salary allowance to Weiss, 12% interest on their initial investments, and sharing the balance equally. (Leave no cell blank. Enter "0" when the answer is zero.)arrow_forwardDallas and Weiss formed a partnership to manage rental properties, by investing $164,000 and $246,000, respectively. During its first year, the partnership recorded profit of $514,000. Required: Prepare calculations showing how the profit should be allocated to the partners under each of the following plans for sharing profit and losses: a. The partners failed to agree on a method of sharing profit. b. The partners agreed to share profits and losses in proportion to their initial investments. c. The partners agreed to share profit by allowing a $156,000 per year salary allowance to Dallas, an $86,000 per year salary allowance to Weiss, 12% interest on their initial investments, and sharing the balance equally. (Leave no cell blank. Enter "0" when the answer is zero.)arrow_forwardDallas and Weiss formed a partnership to manage rental properties, by investing $207,000 and $243,000, respectively. During its first year, the partnership recorded profit of $551,000. Required: Prepare calculations showing how the profit should be allocated to the partners under each of the following plans for sharing profit and losses: a. The partners failed to agree on a method of sharing profit. Profit > Answer is complete but not entirely correct. Share to Dallas Share to Weiss $ 306,000 $ 245,000 $ 551,000 Totalarrow_forward
- Ramer and Knox began a partnership by investing $60,000 and $90,000, respectively. The partners agreed to share net income and loss by giving annual salary allowances of $50,000 to Ramer and $40,000 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: Determine each partner's share given a first-year net income of $98,800. Determine each partner's share given a first-year net loss of $16,800. Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.arrow_forwardRamer and Knox began a partnership by investing $60,000 and $90,000, respectively. The partners agreed to share net income and loss by giving annual salary allowances of $50,000 to Ramer and $40,000 to Knox, 10% interest allowances on their investments, and any remaining balance shared equally. 1. Determine each partner’s share given a first-year net income of $98,800. 2. Determine each partner’s share given a first-year net loss of $16,800.arrow_forwardRamer and Knox began a partnership by investing $72,000 and $102,000, respectively. The partners agreed to share net income and loss by giving annual salary allowances of $56,000 to Ramer and $44,800 to Knox, 10% interest allowances on their investments, and any remaining balance shared equally. (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 $110,800. 2. Determine each partner's share given a first-year net loss of $28,800. 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 income of $110,800. Allocation of Partnership Income Ramer Knox Total 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 $ 56,000 $ 5,600 44,800 4,800 WIT $ 110,800 100,800 10,000 10,400 400 0…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Principles of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax College
Principles of Accounting Volume 1
Accounting
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax College