BuyFindarrow_forward

Accounting

27th Edition
WARREN + 5 others
ISBN: 9781337272094

Solutions

Chapter
Section
BuyFindarrow_forward

Accounting

27th Edition
WARREN + 5 others
ISBN: 9781337272094
Textbook Problem

Dividing partnership income

Using each of the live assumptions as to income division listed in Exercise 12-3, determine the income participation of Hawes and Albright if the year’s net income is $104,000.

To determine

Partnership

It is that form of organization which is owned and managed by two or more persons who invest and share the profits and losses according to a pre-determined ratio.

To determine:  The participation of partners in the net income of the year under various independent assumptions.

Explanation

Working Notes:

Calculations of division of net income under various assumptions are as follows:

H A Total
a  Net income (1:1) $52,000 $52,000 $104,000
b  Net income (3:1) (1) $78,000 $26,000 $104,000
c  Interest allowance                       (A)

$10,500

(2)

$3,500

(2)

$14,000
Remaining income (2:3)               (B) $36,000 $54,000 $90,000
Net income                           (A)+(B) $46,500 $57,500 $104,000
d Salary allowance                          (C) $36,000 $45,000 $81,000
Remaining income (1:1)              (D) $11,500 $11,500 $23,000
Net income                           (C)+(D) $47,500 $56,500 $104,000

Still sussing out bartleby?

Check out a sample textbook solution.

See a sample solution

The Solution to Your Study Problems

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

Get Started

Additional Business Solutions

Find more solutions based on key concepts

Show solutions add

What is inflation and what causes it?

Principles of Microeconomics (MindTap Course List)

Is the cost of a job related to the price charged? Explain.

Managerial Accounting: The Cornerstone of Business Decision-Making

What is a job cost sheet?

Accounting (Text Only)

BOND VALUATION An investor has two bonds in his portfolio that have a face value of 1,000 and pay a 10% annual ...

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)

What is price discrimination? Is it legal?

Cornerstones of Cost Management (Cornerstones Series)