Admission of partner: Changes in the membership of
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ADVANCED FINANCIAL ACCOUNTING IA
- Finn and Hart form a partnership, contributing $44,000 and $66,000, respectively. Determine their shares of net income or net loss for each of the following independent situations: (Use a minus sign or parentheses when entering losses.) i (Click on the icon to view the independent situations.) ..... Determine partners' shares of net income or net loss for situation a. Net income (loss) More info Finn Hart Total Situation a. а. Net loss is $130,000 and the partners have no written partnership agreement. b. Net income is $100,000 and the partnership agreement states that the partners share profits and losses on the basis of their capital balances. Net income is $120,000. The first $72,000 is shared on the basis of capital balances. The next $36,000 is based on partner service, with Finn receiving 40% and Hart 60%. The remainder is shared equally. с. Print Donearrow_forward4.1 Mimi and Gigi are partners sharing profits and losses in the ratio of 2:3 with capitals of 9,000 and 15,000, respectively. Lulu is to be admitted into the partnership after which they will share profits and losses equally. The books of the old partnership will still be use by the new partnership. REQUIRED: Give the entry to record the admission of Lulu under each of the following independent assumptions. Show also the comparative capital structure and interest of each partner in relation to the total capital before and after the admission of Lulu. a. Lulu buys 1/4 the interest of Mimi for 3,000. b. Lulu buys 1/5 the interest of Gigi for 2,000. c. Lulu buys 1/2 the interest of Mimi for 5,000 and 1/4 the interest of Gigi for 6,000.arrow_forwardFrantz and Hardingan form a partnership, sign or parentheses when entering losses.) (Click on the icon to view the independent contributing $36,000 and $84,000, respectively. Determine their shares of net income or net loss for each of the following independent situations: (Use a minus situations.) Determine partners' shares of net income or net loss for situation a. Net income (loss) Hardingan Situation a. Frantz Totalarrow_forward
- Salim and Rashid form a partnership, investing OR 80,000 and OR 120,000, respectively. Required: Determine their shares of net income: Net income is OR 60,000. The first OR 30,000 is shared on the basis of partner capital balances. The next OR 20,000 is based on partner services, with Salim getting 40% and Rashid 60%. The remainder is shared equally. How can partnership profits and losses be allocated. Please I need answer for these questions. Thanksarrow_forwardW. Mantle, N. Cash, and W. DiMaggio have a partnership called Outlaws. A dispute has arisen among the partners.Mantle has invested twice as much in assets as the other two partners, and he believes net income and net losses should be shared in accordance with the capital ratios.The partnership agreement does not specify the division of profits and losses. How will net income and net loss be divided?arrow_forwardAssume the partnership income-sharing agreement calls for income to be divided with a salary of $30,000 to Coburn and $25,000 to Webb, with the remainder divided 35% to Coburn and 65% to Webb. Prepare the journal entry to record the allocation of net income. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation > Debit Creditarrow_forward
- Given the following information for questions 1- 4: Mrebe and Johannes are in a partnership trading as KwaQongo Farmers. The partners are sharing profits and losses equally. On 30 July 20.1 the following information was extracted from the accounting records of the partnership: EXTRACT OF GIVEN INFORMATION FOR KWAQONGO FARMERS R Capital - Mrebe.. Capital - Johannes.... Current account - Mrebe (Cr).. Current account - Johannes (Dr).. 124 500 110300 45400 28400 Mrebe and Johannes decided to admit Mqithwa from 1 August 20.1. Maithwa will contribute the following to acquire a fifth of the net asset share of the partnership 1. Cash... 2. Farming equipment worth.. 21300 58000 Mrebe and Johannes agreed to relinquish 20% of their share in profits or losses to Mqithwa in the ratio of 3:1 respectively All other assets were revalued before admitting Mqithwa to the partnership. A valuation loss was correctly calculated at. 44000arrow_forwardAnswer the following three questions. Paul and Roger are partners who share income in the ratio of 3:2 (3/5 to Paul and 2/5 to Roger). Their capital balances are $90,000 and $130,000, respectively. The partnership generated net income of $50,000 for the year. What is Paul’s capital balance after closing the revenue and expense accounts to the capital accounts? a.$108,000 b.$115,000 c.$180,000 d.$120,000 Jackson and Campbell have capital balances of $100,000 and $300,000, respectively. Jackson devotes full time and Campbell devotes one-half time to the business. Determine the division of $150,000 of net income in the ratio of capital balances. a.$75,000 and $75,000 b.$37,500 and $112,500 c.$100,000 and $50,000 d.$50,000 and $100,000 Douglas pays Selena $42,600 for her 27% interest in a partnership with net assets of $126,700. Following this transaction, Douglas's capital account should have a credit balance of a.$126,700 b.$11,502 c.$42,600 d.$34,209arrow_forward1. Xavier and Yolanda have original investments of $49,500 and $104,400, respectively, in a partnership. The articles of partnership include the following provisions regarding the division of net income: interest on original investment at 20%; salary allowances of $28,700 and $30,900, respectively; and the remainder to be divided equally. How much of the net income of $112,300 is allocated to Xavier? a.$59,472 b.$28,700 c.$49,560 d.$38,600 2. Xavier and Yolanda have original investments of $50,000 and $100,000, respectively, in a partnership. The articles of partnership include the following provisions regarding the division of net income: interest on original investment at 10%; salary allowances of $38,000 and $28,000, respectively; and the remainder to be divided equally. How much of the net income of $77,000 is allocated to Yolanda? a.$36,000 b.$38,000 c.$44,000 d.$77,000 3. Tomas and Saturn are partners who share income in the ratio of 3:1 (3/4 to Tomas and 1/4 to Saturn). Their…arrow_forward
- PLEASE ANSWER ALL THE FOLLOWING QUESTIONS 1. Seth and Beth have original investments of $50,000 and $100,000, respectively, in a partnership. The articles of partnership include the following provisions regarding the division of net income: interest on original investment at 10%; salary allowances of $27,000 and $18,000, respectively; and the remainder to be divided equally. How much of the net income of $42,000 is allocated to Seth? a.$32,000 b.$23,000 c.$20,000 d.$0 2. Tucker and Titus are partners who share income in the ratio of 3:1 (3/4 to Tucker and 1/4 to Titus). Their capital balances are $31,500 and $61,000, respectively. The partnership generated net income of $48,000 for the year. What is Tucker's capital balance after closing the revenue and expense accounts to the capital accounts? a.$67,500 b.$81,000 c.$40,500 d.$54,000 3. Xavier and Yolanda have original investments of $50,000 and $100,000, respectively, in a partnership. The articles of partnership include the…arrow_forwardRequired: As the accountant for the partnership, compute the amount to be paid to Mrs. Cero under the agreement and prepare the journal entry required to enter the check issued to her in payment of the deceased husband's interest in the partnership. According to the partnership agreement, the difference between the amount paid to Mrs. Cero and the book value of Cero's capital account is allocated to the remaining partners based on their ending capital balances.arrow_forwardTomas and Saturn are partners who share income in the ratio of 3:1 (3/4 to Tomas and 1/4 to Saturn). Their capital balances are $80,500 and $59,500, respectively. The partnership generated net income of $41,700. What is Tomas's capital balance after closing the revenue and expense accounts to the capital accounts? a.$127,619 b.$116,874 c.$111,775 d.$106,895arrow_forward