Prepare a schedule showing the distribution of net income, assuming net income is $24,000. (If an amount reduces the account balance then enter with a negative sign preceding the number or parenthesis, e.g. -15,000, (15,000).) Salary allowance Interest allowance Total salaries and interest $ DIVISION OF NET INCOME McGill $ Smyth $ Total
Prepare a schedule showing the distribution of net income, assuming net income is $24,000. (If an amount reduces the account balance then enter with a negative sign preceding the number or parenthesis, e.g. -15,000, (15,000).) Salary allowance Interest allowance Total salaries and interest $ DIVISION OF NET INCOME McGill $ Smyth $ Total
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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Prepare a schedule showing the distribution of net income, assuming net income is $24,000. (If an amount reduces the account
balance then enter with a negative sign preceding the number or parenthesis, e.g. -15,000, (15,000).)
Salary allowance
Interest allowance
Total salaries and interest
Remaining income/
deficiency
Total division of net income
(b)
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1.
$
No. Account Titles and Explanation
2.
$
>
DIVISION OF NET INCOME
McGill
$
Debit
$
Journalize the allocation of net income in each of the situations above. (Credit account titles are automatically indented when amount
is entered. Do not indent manually. Record entries in the order presented in the previous part.)
Smyth
$
Total
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Transcribed Image Text:McGill and Smyth have capital balances on January 1 of $40,000 and $43,000, respectively. The partnership income-sharing
agreement provides for (1) annual salaries of $20,000 for McGill and $10,000 for Smyth, (2) interest at 10% on beginning capital
balances, and (3) remaining income or loss to be shared 60% by McGill and 40% by Smyth.
(a)
(1)
Prepare a schedule showing the distribution of net income, assuming net income is $81,000. (If an amount reduces the account
balance then enter with a negative sign preceding the number or parenthesis, e.g.-15,000, (15,000).)
Salary allowance
Interest allowance
Total salaries and interest
Remaining income/
deficiency
Total division of net income
(2)
Salary allowance
Interest allowance
Total salaries and interest
Remaining Income/
deficiency
$
Total division of net income
$
DIVISION OF NET INCOME
Prepare a schedule showing the distribution of net income, assuming net income is $24,000. (If an amount reduces the account
balance then enter with a negative sign preceding the number or parenthesis, e.g. -15,000, (15,000).)
$
McGill
$
$
McGill
Smyth
DIVISION OF NET INCOME
$
$
Smyth
Total
$
Total
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