McGill and Smyth have capital balances on January 1 of $56,000 and $36,000, respectively. The partnership income-sharing agreement provides for (1) annual salaries of $24,000 for McGill and $12,000 for Smyth, (2) interest at 10% on beginning capital balances, and (3) remaining income or loss to be shared 70% by McGill and 30% by Smyth. (1) Prepare a schedule showing the distribution of net income, assuming net income is $90,000. (If an amount reduces the account balance then enter with a negative sign preceding the number or parenthesis, e.g. -15,000, (15,000).) (2) Prepare a schedule showing the distribution of net income, assuming net income is $30,000. (If an amount reduces the account balance then enter with a negative sign preceding the number or parenthesis, e.g. -15,000, (15,000).) Journalize the allocation of net income in each of the situations above. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record entries in the order presented in the previous part.)
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Ответ:
capital accounts distribution
DETAILS McGill Smyth total remaining
opening balance $56000 $36000
net income $90000 $90000
salaries $24000 $12000 -$36000 $54000
interest @ 10% $5600 $3600 -$9200 $44800
Profit share 70 : 30% $31360 $13440 -$44800 $0
closing balance $116960 $65040
DETAILS McGill Smyth total remaining
opening balance $56000 $36000
net income $30000 $30000
salaries $24000 $12000 -$36000 - $6000
interest @ 10% $5600 $3600 -$9200 -$15200
loss share 70 : 30% -$10640 -$4560 +$15200 $0
closing balance $74960 $47040
JOURNAL ENTRIES
1 . Debit partnership summary income account $90000, credit capital accounts McGILL ; salary 24000, interest on capital 5600, profit share 31360. Symth ; salary 12000, interest on capital 3600, profit share 13440
2 . Debit Partnership summary income account 30000 , credit Capital accounts McGill : salary 24000 , Smyth : 12000 , Interest on capital account McGill : 5600, Smyth 3600.
for loss sharing journal
Debit Capital accounts McGILL 10640, Smyth 4560 , Credit partnership summary account 15200
Explanation:
Ответ:
Explanation:
Net income $90 000 000
salary allowance is the total of the two
$36000
Refer to McGrill as M and to Smyth as S
M=$24000
S=$12000
Interest $9200
M=($56000*0.1)=$5600
S=($36000*0.1)=$3600
Total income
M=$24000+$5600=$29600
S=$12000+$3600=$15600
So the distribution
$90000-$36000-$9200
=$44800
Then for M=$44800*0.7=31360
S=$44800*0.3=$13440
total distribution
M=$31360+$29600=$60960
S=$13440+$15600=$29040
I income is $30 000000
($30000-$36000-$9200)
-$15200
M=-15200*0.7=-$10640
S=-$15200*0.3=-$4560
Total distributions
M=(-$10640+29600)=$18960
s=(-$4560+$15600)=$11040
Ответ: