Please complete the following problem in Excel. 1. Kara Ries, Tammy Bax and Joe

Question

Please complete the following problem in Excel. 1. Kara Ries, Tammy Bax and Joe Thomas invested $80,000, $112,000 and $128,000 respectively in a partnership. During its first calendar year, he firm earned $249,000. Prepare the entry to close the firm’s Income Summary account as of its December 31 year-end and to allocate the $249,000 net income to the partners under each of the following separate assumptions: The partners 1. Have no agreement on the method of sharing income and loss. 10 pts. 2. Agreed to share income and loss in the ratio of their beginning capital investments and 15 pts. 3. Agreed to share income and loss by providing annual salary allowances of $66,000 to Ries, $56,000 to Bax, and $80,000 to Thomas: granting 10% interest on the partners’ beginning capital investments and sharing the remainder equally. 15 pts.

Explanation / Answer

1)

(dr)Income summary 249,000

(cr)KR, capital 83,000

(cr)TB, capital 83,000
(cr)JT, capital 83,000

2)Begining capital ratio:

KR: 80,000/(80,000+112000+128000)=.25

TB:112000/(80,000+112000+128000)=.35

JT=1-.25-.35=.4

(dr)Income summary 249,000

(cr)KR, capital 249000*.25=62,250

(cr)TB, capital 249,000*.35=87150
(cr)JT, capital 249000*.4=99,600

3)

Related Questions

Navigate

• Browse (All)
• Browse P
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.