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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.
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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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