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
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
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 3PB
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Rodgers and Winter had capital balances of $60,000 and $90,000, respectively, at the beginning of the current fiscal year. The articles of
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 blank 15 | $fill in the blank 16 |
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.
Net income | $65,000 | |||||||
Rodgers | Winter | Total | ||||||
Division of net income: | ||||||||
Salary allowance | $fill in the blank 17 | $fill in the blank 18 | $fill in the blank 19 | |||||
Interest allowance | fill in the blank 20 | fill in the blank 21 | fill in the blank 22 | |||||
Total | fill in the blank 23 | fill in the blank 24 | fill in the blank 25 | |||||
fill in the blank 27 | fill in the blank 28 | fill in the blank 29 | ||||||
Net income |
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