12-5 please see both pictures E12-4 McGill and Smyth have U respectivels. The pa

Question

12-5 please see both pictures

E12-4 McGill and Smyth have U respectivels. The partnenship incomesharing agreement provd of $22,000 for McGill and $13,000 for Smyth, (2) interest at 10% on beginning capital balances and (3) remaining income or loss to be shared 60% by McGill and40% by Smyth (LO2) (a) Prepare a schedule showing the distribution of net income, assuming net income is XLS (1) $50.000 and (2) $36,000 (b) Journalize the allocation of net income in each of the situations above E12-5 Coburn (beginning capital, $60,000) and Webb (beginning capital $90,000) are partners. During 2017, the partnership earned net income of $80,000, and Coburn made Prepare journal entries to record allocation of net income. drawings of $18,000 while Webb made drawings of $24,000. (Lo 2) (a) Assume the partnership income-sharing agreement calls for income to be divided 45% to Coburn and 55% to Webb. Prepare the journal entry to record the allocation of net (b) Assume 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 45% to Coburn and 55% to Webb. Prepare the journal entry to record the allocation of net income

Explanation / Answer

SOLUTION:

Debit Credit 1 Dr. Income Summary $80,000 Cr. Coburn, Capital $36,000 Cr. Webb, Capital $44,000 ($80,000 *45% = $36,000 $80,000 * 55% = $44,000 2 Dr. Income Summary $80,000 Cr. Coburn, Capital $41,250 Cr. Webb, Capital $38,750 [$30,000 + ($25,000 * 45%)]= $41,250 [$25,000 + ($25,000 * 55%)] = $38,750 3 Dr. Income Summary $80,000 Cr. Coburn, Capital $41,000 Cr. Webb, Capital $39,000 [$40,000 + $6,000 - ($10,000 * 50%)]= $41,000 [$35,000 + $9,000 – ($10,000 * 50%)] = $39,000 4 Partners' ending capital balances   Coburn: $60,000 + $41,000 – $18,000   $83,000 Webb: $90,000 + $39,000 – $24,000   $105,000

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