Connect Access Card for Financial Accounting: Information and Decisions
8th Edition
ISBN: 9781259662966
Author: John J Wild
Publisher: McGraw-Hill Education
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Entries for Allocation of Net Income
Danny Spurlock and Tracy Wilson decided to form a partnership on July 1, 20-1.
Spurlock invested $80,000 and Wilson invested $20,000. For the fiscal year ended
June 30, 20-2, a net income of $81,000 was earned. Determine the amount of net
income that Spurlock and Wilson would receive under each of the following
independent assumptions:
Spurlock
Wilson
1. There is no agreement concerning the distribution of net
income.
2. Each partner is to receive 10% interest on their original
investment. The remaining net income is to be divided equally.
3. Spurlock and Wilson are to receive a salary allowance of
$35,000 and $26,000, respectively. The remaining net income is
to be divided equally.
4. Each partner is to receive 10% interest on their original
investment. Spurlock and Wilson are to receive a salary allowance
of $35,000 and $26,000, respectively. The remaining net income
is to be divided as follows: Spurlock, 75% and Wilson, 25%.
Moe, Larry and Curley are partners in a partnership. The partners have always shared
losses and Gains in a 3: 2: 1 ratio and on the date of Curley's retirement they have
the following equities in the partnership:
Moe
24,000
Larry :
30,000
Curley 18,000
Using Today's Date Give in General Journal Form the entry showing the retirement of
Curley under the following unrelated assumptions:
1. Curley retires taking $18,000 of cash with him for his equity
2. Curley retires taking 20,000 of partnership cash with him
Question 1
• Rachael and Olivia are business partners in RO Dance Their partnership agreement states that the
partners will share income in a 3:1 ratio (Rachael, Olivia). Part of the agreement includes a salary
allowance of $43,000 for Rachael and $26,000 for Olivia. For the current year. RO Dance has a net loss
of $5,000. The entries to close the income summary account after allocating the loss to the partners
include
• a debit to Rachael, Capital $12,500 and a credit to Olivia, Capital $7,500
a credit to Rachael, Capital $12,500 and a debit to Olivia, Capital $7,500
•
a debit to Rachael, Capital $12,500 and a debit to Olivia, Capital $7,500
• a credit to Rachael, Capital $12,500 and a credit to Olivia, Capital $7,500
None of these choices are correct
Chapter D Solutions
Connect Access Card for Financial Accounting: Information and Decisions
Ch. D - Prob. 1DQCh. D - Prob. 2DQCh. D - Prob. 3DQCh. D - Prob. 4DQCh. D - Prob. 5DQCh. D - Prob. 6DQCh. D - Prob. 7DQCh. D - Prob. 8DQCh. D - Prob. 9DQCh. D - Prob. 10DQ
Ch. D - Prob. 11DQCh. D - Prob. 12DQCh. D - Prob. 1QSCh. D - Prob. 2QSCh. D - Prob. 3QSCh. D - Prob. 4QSCh. D - Prob. 5QSCh. D - Prob. 6QSCh. D - Prob. 7QSCh. D - Prob. 8QSCh. D - Prob. 1ECh. D - Prob. 2ECh. D - Prob. 3ECh. D - Prob. 4ECh. D - Prob. 5ECh. D - Prob. 6ECh. D - Prob. 7ECh. D - Prob. 8ECh. D - Prob. 9ECh. D - Prob. 10ECh. D - Prob. 11ECh. D - Prob. 12ECh. D - Prob. 1PSACh. D - Prob. 2PSACh. D - Prob. 3PSACh. D - Prob. 4PSACh. D - Prob. 5PSACh. D - Prob. 1PSBCh. D - Prob. 2PSBCh. D - Prob. 3PSBCh. D - Prob. 5PSBCh. D - Prob. 3BTN
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