Dallas and Weiss formed a partnership to manage rental properties, by investing $207,000 and $243,000, respectively. During its firstyear, the partnership recorded profit of $551,000.Required:Prepare calculations showing how the profit should be allocated to the partners under each of the following plans for sharing profitand losses:a. The partners failed to agree on a method of sharing profit.Profit> Answer is complete but not entirely correct.Share toDallasShare toWeiss$ 306,000$ 245,000 $ 551,000Total

The objective of the question is to understand how the profit of a partnership is allocated between…

Answered: Dallas and Weiss formed a partnership…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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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.)
Cyril and James formed a partnership on January 1, 20x1 by contributing P1,600,000 and P2,400,000, respectively. As of January 1, 20x2, their partnership capital was P1,800,000, and P2,200,000 respectively. Situations: A. No profit-sharing agreement B. No loss-sharing agreement C. Profit is divided equally D. Loss is divided 30:70, respectively Required: Compute the share of Cyril and James assuming: P800,000 profit Cyril P800,000 loss Cyril Situational Cases James James 1. A and B (1) (2) (3) (4) (5) (6) (7) (8) 2. B and C 3. A and D 4. C and D
Cyril and James formed a partnership on January 1, 20x1 by contributing P1,600,000 and P2,400,000,respectively. As of January 1, 20x2, their partnership capital was P1,800,000, and P2,200,000 respectively.Situations:A. No profit-sharing agreementB. No loss-sharing agreementC. Profit is divided equallyD. Loss is divided 30:70, respectivelyRequired: Compute the share of Cyril and James assuming:P800,000 profit P 4. C and D (
Stephanie Calamba and Allan Brillantes decided to form a partnership. They agreed that Calamba will invest P200,000 andBrillantes, P300,000. Calamba will devote full time to the business, and Brillantes on part-time only. The following plans forthe division of profits are being considered: a. Equal divisionb. In the ratio of original investmentsc. In the ratio of time devoted to the businessd. Interest of 10% on original investments and the remainder in the ratio of 3:2e. Interest of 10% on original investments, salary allowances of P340,000 to Calamba and P170,000 to Brillantes, andthe remainder equally.f. Plan (e), except that Calamba is also to be allowed a bonus equal to the 20% of the amount by which profit exceedsthe salary allowances. Determine the partners’ share in profit or loss for each of the situations above assuming:(1) Profit of P1,500,000(2) Profit of P660,000
Dylan Howell and Demond Nickles have decided to form a partnership. They have agreed that Howell is to invest $50,000 and that Nickles is to invest $75,000. Howell is to devote full time to the business, and Nickles is to devote one-half time. The following plans for the division of income are being considered:a. Equal divisionb. In the ratio of original investmentsc. In the ratio of time devoted to the businessd. Interest of 10% on original investments and the remainder in the ratio of 3:2e. Interest of 10% on original investments, salary allowances of $38,000 to Howell and $19,000 to Nickles, and the remainder equally.f. Plan (e), except that Howell is also to be allowed a bonus equal to 20% of the amount by which net income exceeds the total salary allowances Instructions For each plan, determine the division of the net income under each of the following assumptions:(1) net income of $420,000 and (2) net income of $150,000. Present the data in tabular form, using the following…
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.
Moore, Probst, and Tanski formed a partnership whose profit and loss agreement contained provisions summarized as follows:(attached)If the weighted-average capital is negative, interest at 10% will be charged against the partner’s profit allocation. All provisions of the profit and loss agreement should be satisfied and any resulting deficiency should be allocated based on the profit and loss percentages. Assuming current-year income of $168,000, determine how the income should be allocated to the partners.
Requirement: Compute for the respective shares of the partners in | shared equally, while losses on a 70:30 ratio. The partnership PROBLEM 3: EXERCISES 1. Partners A and B share in profits and los es on a 70:30 ratio after salaries of P80,000 for A and P40,000 or B. The business earned profit of P180,000 before deduction or the salaries. Requirements: a. Compute for the partners' respective share in the profit. b. Provide the journal entries (the salar are withdrawn periodically). for annual salary 2. A and B's partnership agreement provi allowances of P160,000 for A and P80, for B. Profits are earned profit of P200,000. Reguirement: Compute for the respective shares of the partners in the profit.
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
Dallas 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. Share to Share to Total Dallas Weiss b. The partners agreed to share profits and losses in proportion to their initial investments. Share to Share to Weiss Total Dallas
Jenkins, Willis, and Trent invested $220,000, $385,000, and $495,000, respectively, in a partnership. During its first yeal the firm recorded profit of $615,000. Required: Prepare entries to close the firm's Income Summary account as of December 31 and to allocate the profit to the partners under each of the following assumptions: a. The partners did not produce any special agreement on the method of distributing profits. c. The partners agreed to share profit by providing annual salary allowances of $115,000 to Jenkins, $125,000 to Willis, and $60,000 to Trent; allowing 15% interest on the partners' beginning investments; and sharing the remainder 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.

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