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# hw1 - Problem 12-1A(50 minutes 1 Dec 31 Income Summary Kim...

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Problem 12-1A (50 minutes) 1. Dec. 31 Income Summary .................................................................................. 124,500 Kim Ries, Capital ............................................................................. 41,500 Tere Bax, Capital ............................................................................. 41,500 Josh Thomas, Capital ..................................................................... 41,500 To close Income Summary. 2. Dec. 31 Income Summary .................................................................................. 124,500 Kim Ries, Capital ............................................................................. 31,125 Tere Bax, Capital ............................................................................. 43,575 Josh Thomas, Capital ..................................................................... 49,800 To close Income Summary*. *Supporting computations (\$40,000/\$160,000) x \$124,500 = \$31,125 (\$56,000/\$160,000) x \$124,500 = \$43,575 (\$64,000/\$160,000) x \$124,500 = \$49,800 3. Dec. 31 Income Summary .................................................................................. 124,500 Kim Ries, Capital ............................................................................. 39,500 Tere Bax, Capital ............................................................................. 36,100 Josh Thomas, Capital ..................................................................... 48,900 To close Income Summary*. *Supporting calculations Ries Bax Thomas Total Net income ................................................ \$124,500 Salary allowances Ries ......................................................... \$33,000 Bax .......................................................... \$28,000 Thomas ................................................... \$40,000 Total salaries ............................................. 101,000 Balance after salary allowances ............. 23,500 Interest allowances Ries (10% on \$40,000) ........................... 4,000 Bax (10% on \$56,000) ............................ 5,600 Thomas (10% on \$64,000) ..................... 6,400 Total interest ............................................. 16,000 Bal. after interest and salaries ................ 7,500 Balance allocated equally ........................ 2,500 2,500 2,500 Total allocated equally ............................. 7,500 Balance of income .................................... ______ ______ ______ \$ 0 Shares of the partners ............................. \$39,500 \$36,100 \$48,900

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Part 1 Income (Loss) Sharing Plan Calculations Bill Ron Barb Total (a) \$450,000/3 ................................................................ \$150,000 \$150,000 \$150,000 \$450,000 (b) \$225,000 x (\$183,750/\$525,000) ................................ 78,750 \$225,000 x (\$131,250/\$525,000) ................................ 56,250 \$225,000 x (\$210,000/\$525,000) ................................ ______ ______ 90,000 Total allocated .......................................................... \$78,750 \$56,250 \$90,000 \$225,000 (c) Net income ............................................................... \$225,000 Salary allowances ..................................................... \$40,000 \$30,000 \$45,000 (115,000 ) Balance of income .................................................... \$110,000 Interest allowances 10% x \$183,750 ..................................................... 18,375 10% x \$131,250 ..................................................... 13,125 10% x \$210,000 ..................................................... 21,000 Total interest ............................................................ (52,500 ) Bal. of income ........................................................... \$57,500 Balance allocated ......................................... equally 19,167 19,167 19,167 (57,500 ) * Balance of income .................................................... \$ 0 Shares of partners ...................................... partners \$77,542 \$62,292 \$85,167 * Rounding difference of \$1.
Problem 12-3A (Concluded) Part 2 BRB PARTNERSHIP Statement of Partners' Equity For Year Ended December 31 Bill Ron Barb Total Beginning capital balances ..................................... \$ 0 \$ 0 \$ 0 \$ 0 Plus Investments by owners .................................... 183,750 131,250 210,000 525,000 Net income Salary allowances ......................................... 40,000 30,000 45,000 Interest allowances ....................................... 18,375 13,125 21,000 Balance allocated equally ................................ (21,000 ) (21,000 ) (21,000 ) Total net income .......................................... 37,375 22,125 45,000 104,500 Total ............................................................. 221,125 153,375 255,000 629,500 Less partners' withdrawals ................................... (17,000 ) (24,000 ) (32,000 ) (73,000 ) Ending capital balances ........................................ \$ 204,125 \$ 129,375 \$ 223,000 \$556,500 Part 3 Dec. 31 Income Summary .......................................................................................... 104,500 Bill Beck, Capital ..................................................................................... 37,375 Ron Beck, Capital .................................................................................... 22,125

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