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Chapter 13_Partnership_Problem 1 & 2

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Question;Advanced;Accounting Assigned Problem 1 ? Chapter 13;a);Fox, George, and Hayes form a partnership on 1-1-20X1. Fox contributes cash of $40,000 and equipment;with a book value to Fox of $8,000 and a fair market value of $10,000. George contributes cash of $25,000 and;equipment with a book value to George of $30,000 and a fair market value of;$25,000. Hayes contributes $5,000 of;cash and equipment with a book value to Hayes of $15,000 and a fair market;value of $20,000.;Prepare the entry for the admission of the;partners to the new partnership.;b);Fox, George, and Hayes partnership agree states the following regarding;the allocation of net income;?;Interest on beginning of the;year capital balances is 5 percent.;?;A bonus is to be allocated to;George computed as 10 percent of income after the bonus and in excess of;$50,000 (George?s name is important to the partnership ? thus the bonus);?;A salary of $40,000 is to be;allocated to Fox (Fox is the only partner working in the partnership).;?;Any remaining income is to be;allocated 20 percent to Fox, 60 percent to George, and 20 percent to Hayes.;Compute how much of the $90,000 of;partnership income for year 20X1 is to be allocated to each partner.;Advanced;Accounting Assigned Problem 2 ? Chapter 13;The Roe, Soh, and Tow Partnership earned $150,000;of net income for the year. The;partnership agreement states the following regarding the allocation of net;income;?;Salary to Roe of $40,000;Salary to Soh of $60,000, Salary to Tow of $50,000;?;Interest on average capitals ?;the interest amounts are computed as $3,000 to Roe, $4,200 to Soh, and $4,800;to Tow.;?;Any remaining income is to be;allocated 25 percent to Roe, 40 percent to Soh, and 35% to Tow.;Show the entry made to close income summary;to partner capital.

 

Paper#37405 | Written in 18-Jul-2015

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