Frontenac Company reported net income of $81,800. The partnership agreement provides for salaries of $24,500 to Miley and $17,800 to Guthrie. They divide the remainder 39% to Miley and 61% to Guthrie. Calculate division of net income. Prepare the closing entry.

Frontenac Company reported net income of $81,800. The partnership agreement provides for salaries of $24,500 to Miley and $17,800 to Guthrie. They divide the remainder 39% to Miley and 61% to Guthrie. Calculate division of net income. Prepare the closing entry.

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter19: Accounting For Partnerships

Section: Chapter Questions

Problem 3CE

See similar textbooks

Similar questions

Reardon and Reese had capital balances of $140,000 and $160,000, respectively, at the beginning of the current fiscal year. The partnership agreement provides for salary allowances of $25,000 and $35,000, respectively; an allowance of interest at 12% on the capital balances at the beginning of the year; and the remaining net income divided equally. Net income for the current year was $120,000. a. Present the Division of net income statement for the current year. Net income $120,000 Reardon Reese Total Division of net income: Salary allowance $fill in the blank 1 $fill in the blank 2 $fill in the blank 3 Interest allowance fill in the blank 4 fill in the blank 5 fill in the blank 6 fill in the blank 8 fill in the blank 9 fill in the blank 10 Net income $fill in the blank 11 $fill in the blank 12 $fill in the blank 13 b. Assuming that the net income had been $76,000 instead of $120,000, present the Division of…
Martin Farley and Ashley Clark formed a limited liability company with an operating agreement that provided a salary allowance of $40,000 and $30,000 to each member, respectively. In addition, the operating agreement specified an income-sharing ratio of 3:2. The two members withdrew amounts equal to their salary allowances. Revenues were$668,000 and expenses were $520,000, for a net income of $148,000.a. Determine the division of $148,000 net income for the year.b. Provide journal entries to close the (1) revenues and expenses and (2) drawing accounts for the two members.c. If the net income was less than the sum of the salary allowances, how would income be divided between the two members of the LLC?
Morrison and Greene have decided to form a partnership. They have agreed that Morrison is to invest $156,000 and that Greene is to invest $52,000. Morrison is to devote one-half time to the business, and Greene is to devote full time. The following plans for the division of income are being considered: Equal division. In the ratio of original investments. In the ratio of time devoted to the business. Interest of 6% on original investments and the remainder equally Interest of 6% on original investments, salary allowances of $45,000 to Morrison and $80,000 to Greene, and the remainder equally Plan (e), except that Greene is also to be allowed a bonus equal to 20% of the amount by which net income exceeds the total salary allowances Required: For each plan, determine the division of the net income under each of the following assumptions: (1) net income of $163,000 and (2) net income of $240,000. Round answers to the nearest whole dollar.
Rodgers and Winter had capital balances of $60,000 and $90,000, respectively, at the beginning of the current fiscal year. The articles of partnership provide for salary allowances of $25,000 and $30,000, respectively; an allowance of interest at 12% on the capital balances at the beginning of the year; and the remaining net income divided equally. Net income for the current year was $110,000. a. Present the Division of net income section of the income statement for the current year. excess allowance over net inome/remaining income Net income $110,000 Rodgers Winter Total Division of net income: Salary allowance $ $ $ Interest allowance Total Net income $ $ $ b. Assuming that the net income had been $65,000 instead of $110,000, present the Division of net income section of the income statement for the current year. excess allowance over net…
Morrison and Greene have decided to form a partnership. They have agreed that Morrison is to invest $222,000 and that Greene is to invest $74,000. Morrison is to devote one-half time to the business, and Greene is to devote full time. The following plans for the division of income are being considered: Equal division. In the ratio of original investments. In the ratio of time devoted to the business. Interest of 5% on original investments and the remainder equally Interest of 5% on original investments, salary allowances of $60,000 to Morrison and $90,000 to Greene, and the remainder equally Plan (e), except that Greene is also to be allowed a bonus equal to 20% of the amount by which net income exceeds the total salary allowances Required: For each plan, determine the division of the net income under each of the following assumptions: (1) net income of $160,000 and (2) net income of $240,000. Round answers to the nearest whole dollar. (1) (2) $160,000 $240,000 Plan…
Black and Shannon have decided to form a partnership. They have agreed that Black is to invest $360,000 and that Shannon is to invest $120,000. Black is to devote one-half time to the business, and Shannon is to devote full time. The following plans for the division of income are being considered: Equal division In the ratio of original investments In the ratio of time devoted to the business Interest of 6% on original investments and the remainder equally Interest of 6% on original investments, salary allowances of $96,000 to Black and $168,000 to Shannon, and the remainder equally Plan (e), except that Shannon is also to be allowed a bonus equal to 20% of the amount by which net income exceeds the total salary allowances Required: For each plan, determine the division of the net income under each of the following assumptions: (1) net income of $276,000 and (2) net income of $480,000. Round answers to the nearest whole dollar. (1) (2) $276,000 $480,000 Plan Black…
Rodgers and Winter had capital balances of $60,000 and $90,000, respectively, at the beginning of the current fiscal year. The articles of partnership provide for salary allowances of $25,000 and $30,000, respectively; an allowance of interest at 12% on the capital balances at the beginning of the year; and the remaining net income divided equally. Net income for the current year was $110,000. a. Present the Division of net income section of the income statement for the current year. Net income $110,000 Rodgers Winter Total Division of net income: Salary allowance $fill in the blank 1 $fill in the blank 2 $fill in the blank 3 Interest allowance fill in the blank 4 fill in the blank 5 fill in the blank 6 Total fill in the blank 7 fill in the blank 8 fill in the blank 9 fill in the blank 11 fill in the blank 12 fill in the blank 13 Net income $fill in the blank 14 $fill in the…
Jenkins, Willis, and Trent invested $208,000, $364,000, and $468,000, respectively, in a partnership. During its first year, the firm recorded profit of $612,000.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. Record to close income summary account. b. The partners agreed to share profit and losses in the ratio of their beginning investments. Record to close income summary account. c. The partners agreed to share profit by providing annual salary allowances of $112,000 to Jenkins, $122,000 to Willis, and $57,000 to Trent; allowing 15% interest on the partners’ beginning investments; and sharing the remainder equally. Record to close income summary account.
PFW Co. reports net income of €45,000. Partner salary allowances are Pitts €15,000, Filbert €5,000, and Witten €5,000. Indicate the division of net income to each partner, assuming the income ratio is 50:30:20, respectively.
Martin Farley and Ashley Clark formed a limited liability company with an operating agreement that provided a salary allowance of $56,000 and $45,000 to each member, respectively. In addition, the operating agreement specified an income-sharing ratio of 3:2. The two members withdrew amounts equal to their salary allowances. Revenues were $668,000 and expenses were $520,000, for a net income of $148,000. Question Content Area a. Determine the division of $148,000 net income for the year. Schedule of Division of Net Income Farley Clark Total Salary allowance $fill in the blank 996889042f95077_1 $fill in the blank 996889042f95077_2 $fill in the blank 996889042f95077_3 Remaining income fill in the blank 996889042f95077_4 fill in the blank 996889042f95077_5 fill in the blank 996889042f95077_6 Net income $fill in the blank 996889042f95077_7 $fill in the blank 996889042f95077_8 $fill in the blank 996889042f95077_9 Question Content Area b. Provide journal…
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…
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.