Advanced Financial Accounting
12th Edition
ISBN: 9781259916977
Author: Christensen, Theodore E., COTTRELL, David M., Budd, Cassy
Publisher: Mcgraw-hill Education,
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Question
Chapter 15, Problem 15.1.4E
To determine
Concept Introduction:
Initial Investment in Partnership:
When a partnership is formed, all partners can contribute for their capital. Contribution can be in cash or can be in form of fixed assets. When a partner contributes fixed assets as capital, then its capital contribution is fair value of assets contributed.
:
J’s capital account balance at April 1.
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Required information
[The following information applies to the questions displayed below.]
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.
2. The partners agreed to share income and loss in proportion to their initial investments. Net income is $160,000.
Note: Do not round intermediate calculations.
Fraction to Allocate
Ramer
Ramer's Share Fraction to Allocate Knox's Share of Total Income
of Income
Knox
Income
Allocated
$125,000 / $50,000
$125,000/ $75,000
$50,000/ $125,000
$50,000/ $75,000
$
0
Required information
[The following information applies to the questions displayed below.]
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.
2. The partners agreed to share income and loss in proportion to their initial investments. Net income is
$160,000.
Note: Do not round intermediate calculations.
Fraction to
Allocate Ramer
$60,000/ $150,000
X Answer is complete but not entirely correct.
Ramer's
Share of
Income
$ 160,000 X
Fraction to
Allocate Knox
$90,000/
$150,000
$
Knox's
Share of
Income
160,000
Total
Income
Allocated
$
320,000
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
Chapter 15 Solutions
Advanced Financial Accounting
Ch. 15 - Prob. 15.1QCh. 15 - Prob. 15.2QCh. 15 - Prob. 15.3QCh. 15 - Prob. 15.4QCh. 15 - Under what circumstances would a partner’s capital...Ch. 15 - Prob. 15.6QCh. 15 - Prob. 15.7QCh. 15 - Prob. 15.8QCh. 15 - Prob. 15.9QCh. 15 - Prob. 15.10Q
Ch. 15 - Prob. 15.11QCh. 15 - Prob. 15.12QCh. 15 - Prob. 15.13QCh. 15 - Prob. 15.14QCh. 15 - Prob. 15.15AQCh. 15 - Prob. 15.16BQCh. 15 - Prob. 15.1CCh. 15 - Prob. 15.2CCh. 15 - Prob. 15.3CCh. 15 - Prob. 15.1.1ECh. 15 - Prob. 15.1.2ECh. 15 - Prob. 15.1.3ECh. 15 - Prob. 15.1.4ECh. 15 - Multiple-Choice on Initial Investment [AICPA...Ch. 15 - Prob. 15.2ECh. 15 - Prob. 15.3ECh. 15 - Prob. 15.4ECh. 15 - Prob. 15.5ECh. 15 - Prob. 15.6ECh. 15 - Prob. 15.7ECh. 15 - Prob. 15.8.1ECh. 15 - Prob. 15.8.2ECh. 15 - Prob. 15.8.3ECh. 15 - Prob. 15.8.4ECh. 15 - Prob. 15.8.5ECh. 15 - Prob. 15.8.6ECh. 15 - Prob. 15.8.7ECh. 15 - Prob. 15.8.8ECh. 15 - Prob. 15.9ECh. 15 - Retirement of a Partner On January 1, 20X1, Eddy...Ch. 15 - Prob. 15.11PCh. 15 - Prob. 15.12PCh. 15 - Prob. 15.13PCh. 15 - Prob. 15.14PCh. 15 - Withdrawal of a Partner under Various Alternatives...Ch. 15 - Prob. 15.16.1PCh. 15 - Prob. 15.16.2PCh. 15 - Prob. 15.16.3PCh. 15 - Prob. 15.16.4PCh. 15 - Prob. 15.16.5PCh. 15 - Prob. 15.16.6PCh. 15 - Prob. 15.16.7PCh. 15 - Prob. 15.16.8PCh. 15 - Prob. 15.16.9PCh. 15 - Prob. 15.17PCh. 15 - Prob. 15.18PCh. 15 - Initial investments and Tax Bases [AICPA Adapted]...
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