Advanced Accounting
12th Edition
ISBN: 9781305084858
Author: Paul M. Fischer, William J. Tayler, Rita H. Cheng
Publisher: Cengage Learning
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Chapter 13, Problem 13.1P
To determine
Concept Introduction:
People start their own business and select the form of organisation depend upon their need and kind of their business.
The statement for allocation of income to the partners.
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Rockford, Skeeba, and Tapinski are partners in a business which manufactures specialty railings. Their profit and loss agreement provides for the allocation of profits and losses as follows: 1. Salaries of $50,000, $40,000, and $55,000 for Rockford, Skeeba, and Tapinski, respectively. 2. Skeeba will receive a bonus equal to 5% of sales in excess of $1,000,000. 3. All partners will receive a bonus of 10% of net income in excess of $150,000 after their bonus. 4. Partners will be allocated interest on their weighted-average capital balance to the extent that it exceeds $50,000. Drawings in excess of annual salaries will be considered a reduction in capital. Interest is computed at the rate of 10%. 5. Remaining profits or losses will be allocated 35%, 25%, and 40% to Rockford, Skeeba, and Tapinski, respectively.6. Gains or losses from the sale of depreciable assets will be excluded from the above provisions and will be equally allocated between Rockford and Tapinski. Activity in the…
Profit sharing to the Andara firm which got a loss of IDR 15,820,800, - which is a mustborne by Sani, Rina and Tika as allies involved. Profit formation and sharingin accordance with the agreement are as follows;1. Tika's share is 20% of profit / loss2. Sani and Rina get interest for the initial capital of IDR 2,500,0003. Sani gets a salary of IDR 100,000 / month and Rina IDR 150,000 / month4. The remainder is divided equally among Sani and Rina.Calculate the total partnership capital based on the profit sharing at the Andara firm!
Partners A, B, and C have a profit and loss agreement with the following provisions: salaries of $13,000 and $12,000 for A and C, respectively; a bonus to C of 10% of net income after bonus; and interest of 6% on ending capital in excess of $100,000. Ending capital balance is $80,000 for A, $150,000 for B, and $110,000 for C. Remaining profit/loss is allocated to A, B, C in the ratio of 2:1:1. If the partnership had net income of $22,000, how much should be allocated to Partner C?
Select one:
14,600
8,700
850
12,450
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