(Adjustment of accumulated profit and reserves) A, B and Care partners sharing profit and losses in the ratio of 2:2: 1B retires from the firm on 31" March 2015. On the date of B's retirement, the following balances appeared in the books Of the firm: Profit & Loss A/c 50,000 General Reserve 30,000 Workmen's Compensation Reserve 40,000 Deferred Revenue Expenditure 30,000 Pass the necessary journal entries for the adjustment of these items on B's retirement

(Adjustment of accumulated profit and reserves) A, B and Care partners sharing profit and losses in the ratio of 2:2: 1B retires from the firm on 31" March 2015. On the date of B's retirement, the following balances appeared in the books Of the firm: Profit & Loss A/c 50,000 General Reserve 30,000 Workmen's Compensation Reserve 40,000 Deferred Revenue Expenditure 30,000 Pass the necessary journal entries for the adjustment of these items on B's retirement

Financial Accounting

14th Edition

ISBN:9781305088436

Author:Carl Warren, Jim Reeve, Jonathan Duchac

Publisher:Carl Warren, Jim Reeve, Jonathan Duchac

Chapter12: Accounting For Partnerships And Limited Liability Companies

Section: Chapter Questions

Problem 3PA

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Costello & Summers are partners in a merchandising business. During 2014, they withdrew their salary allowances of P 34,000 & P 59,000 respectively. Bonus is given to Summers based on 20% of net income after salaries but before bonus and the remaining profit & loss equally by Costello & Summers. The partners’ capital accounts show the following: COSTELLO SUMMERS Beginning Balance P 85,000 P 67,000 Additional Investments 40,000 43,000 Withdrawal other than salary allowance 35,000 20,000 What is Summer’s capital if Costello’s capital after dividing net income is P 138,800? a. P 201,750 b. P 163,200 c. P 158,320 d. P 155,067
On October 01, 2019, Benny and Joey pooled their resources in a partnership with the firm taking over their business assets and assuming their business liabilities. They agreed to make the following adjustments and to make settlement among themselves to conform to the 40:60 capital and profit and loss ratio. ➢ Joey’s inventory be reduced by P3,000. ➢ Allowance for doubtful accounts be recognized in the amount of P1,500 each. ➢ P4,000 of unrecorded accounts payable to supplier be recorded in the books of Benny ➢ Accrued utilities be recognized in the books of Benny, P1,200. ➢ Store equipment in the books of Joey are under depreciated by P5,000. The individual trial balance before adjustments show the following: BennyJoey AssetsP120,000P150,000 Liabilities 25,000 35,000 Capital 95,000 115,000 The capital balances of the partners that conform with their agreement are: Benny: ___________________Joey: _____________________
The following were the balance of the partnership between Reynolds and Wynter as at December 31, 2015. DR $ CR $ Capital on January 1, 2015 Reynolds 35,000 Wynter  35,000 Current accounts on January 1, 2015 Reynolds 1,700 Wynter 400 Drawings during the year Reynolds 8000 Wynter 6400 Land and building .........................................160 000 Equipment .......................................................15000 Cash and bank .................................................20000 Bank loan .................................................................. 90,000 Electricity ..........................................................1400 Office salaries .................................................40000…
Lambert Company had a $15,300 loss for the year ended October 31, 2024. The company is a partnership owned by Lilia and Terry Lambert. Salary allowances for the partners are Lilia $24,900 and Terry $15,000. Interest allowances are Lilia $5,300 and Terry $9,300. The remainder is shared 75% by Lilia and 25% by Terry. (a) Calculate the loss to be allocated to each partner. (b) Prepare a journal entry to close the Income Summary account.Prepare financial statements.
On January 1, 2017, the dental partnership of Angela, Diaz, and Krause was formed when the partners contributed $30,000, $58,000, and $60,000, respectively. Over the next three years, the business reported net income and (loss) as follows: 2017 . . . . . . . . . . . . . .. . . . . $70,000 2018 . . . . . . . . . . . . . . . . . . 42,000 2019 . . . . . . . . . . . . . . . . . . (25,000) During this period, each partner withdrew cash of $15,000 per year. Krause invested an additional $5,000 in cash on February 9, 2018.At the time that the partnership was created, the three partners agreed to allocate all profits and losses according to a specified plan written as follows:∙ Each partner is entitled to interest computed at the rate of 10 percent per year based on the individual capital balances at the beginning of that year.∙ Because of prior work experience, Angela is entitled to an annual salary allowance of $12,000 per year and Diaz is entitled to an annual salary allowance of…
Partners A,B and C decided to liquidate their business on January 31, 2021 and showed the following financial position: ASSETS LIABILITIES & STOCKHOLDER'S EQUITY Cash 28,000 Accounts Payable 14,400 Non-Cash Assets 36,000 Loan Payable to A 4,000 A, Capital 8,000 B, Capital 16,000 C, Capital 21,600 Totals 64,000 Totals 64,000 It was also agreed that cash distribution be made at the end of each month provided there was sufficient cash for this purpose. Profit and loss ratio was 2:1:2 respectively. The liquidation transactions for the months of February, March and April were as Follows: Cash Proceeds BV of Assets Sold Liabilities paid Liquidation Expense Restricted Cash for future expenses February 8,000 12,000 12,000 2,400 1,600 March 12,800 16,000…
Partners A,B and C decided to liquidate their business on January 31, 2021 and showed the following financial position: ASSETS LIABILITIES & STOCKHOLDER'S EQUITY Cash 28,000 Accounts Payable 14,400 Non-Cash Assets 36,000 Loan Payable to A 4,000 A, Capital 8,000 B, Capital 16,000 C, Capital 21,600 Totals 64,000 Totals 64,000 It was also agreed that cash distribution be made at the end of each month provided there was sufficient cash for this purpose. Profit and loss ratio was 2:1:2 respectively. The liquidation transactions for the months of February, March and April were as Follows: Cash Proceeds BV of Assets Sold Liabilities paid Liquidation Expense Restricted Cash for future expenses February 8,000 12,000 12,000 2,400 1,600 March 12,800 16,000…
Tom and Julie formed a management consulting partnership on January 1, 2016. The fair value of the net assets invested by each partner follows: Tom Julie Cash $12,600 $11,200 Accounts receivable 7,400 5,700 Office supplies 2,100 900 Office equipment 32,600 — Land — 32,200 Accounts payable 2,200 5,500 Mortgage payable — 19,100 During the year, Tom withdrew $16,000 and Julie withdrew $12,800 in anticipation of operating profits. Net profit for 2016 was $46,200, which is to be allocated based on the original net capital investment. (a) Your answer is correct. Prepare journal entries to: 1. Record the initial investment in the partnership. 2. Record the withdrawals 3. Close the Income Summary and Drawing accounts. (Round intermediate calculations to 6 decimal places, e.g. 1.576843 answers to 0 decimal places, e.g. 5,125. Credit account titles are…
On October 1, 2024, Apollo, Brett, and Clark formed the A, B and C partnership. Apollo contributed $27,300; Brett, $42,900; and Clark, $59,800. Apollo will manage the store; Brett will work in the store three-quarters of the time; and Clark will not work in the business. Read the requirements LOADING... . Requirement 1. Compute the partners' shares of profits and losses under each of the following plans: a. Net loss for the year ended September 30, 2025, is $55,000, and the partnership agreement allocates 70% of profits to Apollo, 15% to Brett, and 15% to Clark. The agreement does not discuss the sharing of losses. (Use parentheses or a minus sign for loss amounts. Complete all answer boxes. For amounts that are $0, make sure to enter "0" in the appropriate cell.) A, B and C Allocation of Profits and Losses Apollo Brett Clark Total a. Net income (loss) Capital allocation:…
Which of the following expenses is deductible for the current year (after 2017)? Group of answer choices Tax return preparation fees of $300. Gambling losses to the extent of gambling winnings. Fees paid to an investment advisor to manage one’s stock portfolio. Employee business expenses of $500 not reimbursed by the employer.
The Drysdale, Koufax, and Marichal partnership has the following balance sheet immediately prior to liquidation: Cash $ 61,000 Liabilities $ 55,000 Noncash assets 329,000 Drysdale, loan 42,500 Drysdale, capital (50%) 107,500 Koufax, capital (30%) 97,500 Marichal, capital (20%) 87,500 a-1. Determine the maximum loss that can be absorbed in Step 1. Then, assuming that this loss has been incurred, determine the next maximum loss that can be absorbed in Step 2. a-2. Liquidation expenses are estimated to be $21,000. Prepare a predistribution schedule to guide the distribution of cash. Further, modify the tags in explanation as well. b. Assume that assets costing $99,000 are sold for $72,500. How is the available cash to be divided?
Capital balances and profit-and-loss-sharing ratios for the Nix, Man and Per partnership on December 31, 2020, just before the retirement of Nix, are as follows: Nix Capital (30%) 128,000 Man Capital (30%) 140,000 Per Capital (40%) 160,000 Total 428,000 On January 2, 2021, Nix is paid $170,000 cash upon his retirement. Prepare the journal entry(s) to record Nix’s retirement assuming that goodwill, as implied by the payment to Nix, is recorded on the partnership books.