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At the end of its first year of operations on December 31, 2014, NBS Company?s accounts show the following.

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Problem 12-2A At the end of its first year of operations on December 31, 2014, NBS Company?s accounts show the following.;Partner Drawings Capital;Art Niensted $23,000 $48,000;Greg Bolen 14,000 30,000;Krista Sayler 10,000 25,000;The capital balance represents each partner?s initial capital investment. Therefore, net income or net loss for 2014 has not been closed to the partners? capital accounts.;Journalize the entry to record the division of net income for the year 2014 under each of the following independent assumptions. (Credit account titles are automatically indented when amount is entered. Do not indent manually.);(1) Net income is $30,000. Income is shared 6: 3: 1.;(2) Net income is $40,000. Niensted and Bolen are given salary allowances of $15,000 and $10,000, respectively. The remainder is shared equally.;(3) Net income is $19,000. Each partner is allowed interest of 10% on beginning capital balances. Niensted is given a $15,000 salary allowance. The remainder is shared equally.;No. Account Titles and Explanation Debit Credit;1.;2.;3.;SHOW SOLUTION;Prepare a schedule showing the division of net income under assumption (3) above. (If an amount reduces the account balance then enter with a negative sign preceding the number or parenthesis, e.g. -15,000, (15,000).);DIVISION OF NET INCOME;Art Niensted;Greg Bolen Krista Sayler;Total;Salary allowance $ $;Interest allowance on capital;Total salaries and interest

 

Paper#76279 | Written in 18-Jul-2015

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