Chapter 12 - Exercise 12-3 1a 2005 Mar 1 Cash 88,000 Land...

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Unformatted text preview: Exercise 12-3 1a. 2005 Mar. 1 Cash........................................................................................ 88,000 Land....................................................................................... 70,000 Building.................................................................................. 100,000 Long-Term Notes Payable.............................................. 80,000 Abbey, Capital................................................................. 88,000 Adams, Capital................................................................ 90,000 To record initial capital investments. 1b. 2005 Oct. 20 Abbey, Withdrawals............................................................ 32,000 Adams, Withdrawals........................................................... 25,000 Cash................................................................................ 57,000 To record partners’ withdrawals. 1c. 2005 Dec. 31 Abbey, Capital..................................................................... 32,000 Adams, Capital.................................................................... 25,000 Abbey, Withdrawals...................................................... 32,000 Adams, Withdrawals..................................................... 25,000 To close withdrawals accounts. Dec. 31 Income Summary................................................................ 79,000 Abbey, Capital............................................................... 54,400 Adams, Capital.............................................................. 24,600 To close Income Summary account.* 2. Capital account balances Abbey Adams Initial investment.................................... $ 88,000 $ 90,000 Withdrawals............................................ (32,000) (25,000) Share of income*.................................... 54,400 24,600 Ending balances...................................... $110,400 $ 89,600 *Supporting calculations Abbey Adams Total Net income....................................... $79,000 Salary allowance Abbey............................................. $30,000 Total salary allowance.................... 30,000 Balance of income........................... 49,000 Interest allowances Abbey (10% on $88,000).............. 8,800 Adams(10% on $90,000)............... $9,000 Total interest allowances................ 17,800 Balance of income........................... 31,200 Balance allocated equally Abbey............................................. 15,600 Adams............................................ 15,600 Total allocated equally.................... 31,200 Balance of income........................... _______ _______ $ Shares of the partners.................... $54,400 $24,600 Exercise 12-4 Cosmo Ellis Total Plan (1) $165,000 x 1/2......................................... $82,500 $82,500 $165,000 Plan (2) ($50,000/$125,000) x $165,000.............. $66,000 $ 66,000 ($75,000/$125,000) x $165,000.............. ______ $99,000 99,000...
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This note was uploaded on 06/29/2008 for the course ACCT 220 taught by Professor William during the Spring '08 term at University of Findlay.

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Chapter 12 - Exercise 12-3 1a 2005 Mar 1 Cash 88,000 Land...

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