Chapter 12 Homework

Chapter 12 Homework - Assignment Print View Page 1 of 7...

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Unformatted text preview: Assignment Print View Page 1 of 7 Score: 90 out of 90 points (100%) Problem 12-1A Allocating partnership income LO. P2 [The following information applies to the questions displayed below. ] Alex Jeffers, Jo Ford, and Rose Verne invested $46,000, $62,000, and $70,000, respectively, in a partnership. During its first calendar-year, the firm earned $369,900. Prepare the entry to close the firm’s Income Summary account as of its December 31 year-end and to allocate the $369,900 net income to the partners under each of the following separate assumptions: Section Break Problem 12-1A Allocating partnership income LO. P2 award 1 10 out of ' 10 points Problem 12— 1A Part a (a) The partners have no agreement on the method of sharing income and loss. (Omit the "$" sign in your response.) Date General Journal Debit Credit Dec. 31 Income Summagr @ 369,900 4% Alex Jeffers, Capital fl Jo Ford, Capital a Rose Verne, Capital Worksheet Problem 12-1A Part a Learning Objective: 12-P2 Problem 12— 1A Part a (a) The partners have no agreement on the method of sharing income and loss. (Omit the "25" sign in your response.) Date General Journal Dec. 31 Income Summary Alex Jeffers, Capital 1 Jo Ford, Capital 123,300; Rose Verne, Capital 1253300".- award 2 10 out of ' 10 points Problem 12- 1A Part b (b) The partners agreed to share income and loss in the ratio of their beginning capital investments. (Ratio of initial investment should not be rounded. Omit the "$" sign in your response.) Date General Journal Debit Credit http://ezto .mhhm. mcgraW-hill. c0mihm_accounting.tpx?t0d0finintview 9/ 16/2010 Page 2 of 7 Assignment Print View Dec. 31 Income Summam Q 369,900 Q _ V_ Alex Jeffers, Capital a E , & Jo Ford, Capital fl E 128,842 & Rose Verne, Capital a E 145,466 @ Worksheet Problem 12-1A Part b Learning Objective: 12-P2 Problem 12-1A Part b (b) The partners agreed to share income and loss in the ratio of their beginning capital investments. (Ratio of initial investment should not be rounded. Omit the "$" sign in your response.) Date General Journal Debit Credit Dec. 31 Income Summary 369,900 Alex Jeffers, Capital Jo Ford, Capital Rose Verne, Capital award 3 10 out of ' 10 points Problem 12-1A Part c (c) The partners agreed to share income and loss by providing annual salary allowances of $34,000 to Jeffers, $29,000 to Ford, and $41,000 to Verne; granting 10% interest on the partners’ beginning capital investments; and sharing the remainder equally. (Omit the "$" sign in your response.) Date General Journal Debit Credit Dec. 31 Income Summam ® 369,900 $ Alex Jeffers, Capital a? E‘V‘V'V'V'Viii'ifé'é‘fii a do Ford, Capital fi E 117,900 a Rose Verne, Capital @ E 130,700 fi Worksheet Problem 12-1A Part c Learning Objective: 12-P2 Problem 12-1A Part c (c) The partners agreed to share income and loss by providing annual salary allowances of $34,000 to Jeffers, $29,000 to Ford, and $41,000 to \lerne; granting 10% interest on the partners’ beginning capital investments; and sharing the remainder equally. (Omit the "$" sign in your response.) Date General Journal Debit Credit ,a Dec. 31 Income Summary Alex Jeffers, Capital 121,300. Jo Ford, Capital ' ' Rose Verne, Capital Problem 12-3A Partnership income allocation, statement of partners' equity, and closing entries L. 0. P2 [The following information applies to the questions displayed below. ] Will Beck, Trevor Beck, and Barb Beck form ed the BBB Partnership by making capital contributions of $198,750, $141,964, and $227,143, respectively. They predict annual partnership net income of http://ezto .mhhm. mcgraW-hill. c0m/hm_accounting.tpx?t0d0finintview 9/ 16/2010 Assignment Print View Page 3 of 7 $215,000 and are considering the following alternative plans of sharing income and loss: (a) equally; (b) in the ratio of their initial capital investments; or (c) salary allowances of $43,000 to Will, $33,000 to Trevor, and $48,000 to Barb; interest allowances of 10% on their initial capital investments; and the balance shared equally. Problem 12-3A Partnership income Section Break allocation; statement of partners' equity, and closing entries LO. P2 award 4 10 out of 10 points Problem 12-3A Requirement 1 Requirement 1: Use the table to show how to distribute net income of $215,000 for the calendar year under each of the alternative plans being considered. (Note: Due to rounding, the total of both the partners' share may not be equal to net income or loss for the respective year.) (Ratio of initial investment should not be rounded. Round your answers to the nearest whole dollar amount. Omit the "$" sign in your response.) Income (Loss) Sharing Plan Will Trevor Barb Total 00 $m$ $me $m$ $me (b) $75,250 $ $ 53,750 a $86,000 ’fl $ 215 000 @ (c) $74 280 $ $58 601 & $82119$ $215000$ Worksheet Problem 12-3A Requirement 1 Learning Objective: 12-P2 Problem 12—3A Requirement 1 Requirement 1: Use the table to show how to distribute net income of $215,000 for the calendar year under each of the alternative plans being considered. (Note: Due to rounding, the total of both the partners' share may not be equal to net income or loss for the respective year.) (Ratio of initial investment should not be rounded. Round your answers to the nearest whole dollar amount. Omit the "95" sign in your response.) Income (Loss) Sharing Plan Will Trevor Barb Total “V’iii‘éfibii (a) $ 'V'er'lféérwfl'f $ é"W?1:El§??1w$g'V'vafl'JEEVFVE'T$ 75,250 HMEETFEEW $ (“3535? 2151000“ $ 74,280:1 $3 58,60111 $§ 82,11911 2151000“ Explanation: Plan (a) 321500013 $215,00013 $215,00013 Plan (b) $215,000 x ($193,750/$567,357) $215,000 x ($141 ,964l$567;857) $215,000 x ($227,143/$567,357) Plan (c) $43,000+(10% x $193,750)+11,405 $33,000+(10% x $141,964)+11,405 $43,000+(10% x $227,143)+11,405 award 5 10 out of ' 10 points http://ezto .mhhm. mcgraW-hill. c0m/hm_accounting.tpx?t0d0finintview 9/ 16/2010 Assignment Print View Page 4 of 7 Problem 12—3A Requirement 2 Requirement 2: Prepare a statement of partners’ equity showing the allocation of income to the partners assuming they agree to use plan (c), that income earned is $94,500, and that Will, Trevor, and Barb withdraw $15,000, $22,000, and $28,000, respectively, at year-end. (Leave no cells blank - be certain to enter "0" wherever required. Amounts in parentheses do not require a minus sign in front of them. Round your answers to the nearest whole dollar amount. Omit the "$" sign in your response.) BBB PARTNERSHIP Statement of Partners' Equity For Year Ended December 31 Will Trevor Barb Total Beginning capital balances $0 '3 $0 Q $ 9 3% $ 9 Q Add: Investments by Owners 5 198,750 IQ 141,964 9 227,143 {3 567,857 Q Net in come Salaq Allowances 1& 43,000 a 33,000 a 48,000 39 Interest Allowances .fi 19,875 £9 14,196 $ 22,714 £3} —q_uBaIance Allocated E uaII 6* . .. ...(_._28..z.6.2..e).. .. ......(_._2.8..z.62.3e).-- .. ......(_:_2.8...7§Z.§?). Totalnetincome we Total 232,863 @ 160,398 @ 269,095 {at 662,357 g Less: Partners'Withdrawals Q (15,000 53$) (22,000 @) (28,000 9) (65,000 5E?) Ending capital balances $217,863 Q $138,398 Q :5 241,095 Q :13 597,357 $ Worksheet Problem 12-3A Requirement 2 Learning Objective: 12-P2 Problem 12—3A Requirement 2 Requirement 2: Prepare a statement of partners’ equity showing the allocation of income to the partners assuming they agree to use plan (c), that income earned is $94,500, and that Will, Trevor, and Barb withdraw $15,000, $22,000, and $28,000, respectively, at year-end. (Leave no cells blank - be certain to enter "0" wherever required. Amounts in parentheses do not require a minus sign in front of them. Round your answers to the nearest whole dollar amount. Omit the "35" sign in your response.) BBB PARTNERSHIP Statement of Paltners' Equity For Year Ended December 31 Wlll Beginning capital balances $ 0 Investments by Owners i 198, 750 141,964 g 227,143 567,857 Net income I Salary Allowances Interest Allowances 3W Balance Allocated Equally M Total net in come V Total 232,863 x 1 160,399 e Ly Less: Paltners' W1thdrawa|s (EM-15,000”) (EH 22,000”) ' (5 65,000 ) 5 $ “59%.55H7HE .1” . Ending capital balances award 6 10 out of 10 points Problem 12—3A Requirement 3 Requirement 3: Prepare the December 31 journal entry to close Income Summary assuming they agree to use plan http://ezto .mhhm. mcgraW-hill. c0m/hm_accounting.tpx?t0d0finintview 9/ 16/2010 Assignment Print View Page 5 of 7 (c) and that net income is $94,500. Also close the withdrawals accounts. (Round your answers to the nearest whole dollar amount. Omit the "15" sign in your response.) Date General Journal Debit Credit Dec. 31 Income Summary Q 94,500 Q Will Beck, Capital @ Trevor Beck, Capital *& Barb Beck, Capital Q Dec. 31 w." Beck, Capital a g _1_5,000_”§ @ Trevor Beck, Capital a 3 22,000' a; Barb Beck, Capital {3 3 28,000 fifé Will Beck Withdrawals £9 Trevor Beck Withdrawals Q 22,000 & Barb Beck Withdrawals fl @ Worksheet Problem 12-3A Requirement 3 Learning Objective: 12-P2 Problem 12-3A Requirement 3 Requirement 3: Prepare the December 3‘1 journal entry to close Income Summary assuming they agree to use plan (c) and that net income is $94,500. Also close the withdrawals accounts. (Round your answers to the nearest whole dollar amount. Omit the "$" sign in your response.) Date General Journal Debitwwww Credit Dec. 31 Income Summary Will Beck, Capital Trevor Beck, Capital 318, 434 e - Barb Beck, Capital 91,952 i '- Dec. 31 Will Beck, Capital Trevor Beck, Capital Barb Beck, Capital Will Beck, Withdrawals Trevor Beck, Withdrawals Barb Beck, Withdrawals Problem 12—4A Partner withdrawal and admission l_.O. P3 [The following information applies to the questions displayed below. ] Meir, Zarcus, and Ross are partners and share income and loss in a 2:3:5 ratio. The partnership's capital balances are as follows: Meir, $78,000; Zarcus, $119,000; and Ross, $203,000. Zarcus decides to withdraw from the partnership, and the partners agree to not have the assets revalued upon Zarcu s's retirement. Problem 12-44 Partner withdrawal and Section Break admission LO. P3 award 7 30 out of ' 30 points Problem 12-4A Requirement 2 Requirement 2: Assume that Zarcus does not retire from the partnership described in Requirement ‘1. Instead, Potter http://ezto .mhhm. mcgraW-hill. comlhm_accounting.tpx?tod0finintview 9/ 16/2010 Assignment Print View Page 6 of 7 is admitted to the partnership on February 1 with a 25% equity. Prepare journal entries to record Potter's entry into the partnership under each of the following separate assumptions (Due to rounding sum of debits will not equal sum of credits. Round your answers to the nearest dollar amount. Omit the "35" sign in your response.): (a) Potter invests $133,333 Date General Journal Debit _ Credit Feb. 1 Cash at? 133,333 @ Potter, Capital a 133 333 w (b) Potter invests $97,333 Date General Journal Debit Credit Feb. 1 Cash % £3 Meir, Capital #6» 5,400 a Zarcus, Capital § wwwwww & Ross, Capital fit a 13,500 g; Potter, Capital a 124,333 a (c) Potter invests $174,666 Date _ General Journal Debit _ Credit Feb. 1 Cash at 174,666 $9 Meir, Capital fir Zarcus, Capital 9 Ross, Capital @ Potter, Capital Q Worksheet Problem 12-4/4 Requirement 2 Learning Objective: 12-P3 Problem 12—4A Requirement 2 Requirement 2: Assume that Zarcus does not retire from the partnership described in Requirement 1. Instead, Potter is admitted to the partnership on February 1 with a 25% equity. Prepare journal entries to record Potter's entry into the partnership under each of the following separate assumptions (Due to rounding sum of debits will not equal sum of credits. Round your answers to the nearest dollar amount. Omit the "15" sign in your response): (a) Potter invests $133,333 Date General Journal Debit Credit Feb.1 Cash 133,333} Potter, Capital 133, 333 ' (b) Potter invests $97,333 Date General Journal Feb.1 Cash Meir, Capital Zarcus, Capital , Ross, Capital $13,500 1 ‘ Potter, Capital (0) Potter invests $174,666 Date General Journal Debit _ Credit Feb.1 Cash {W7fl7ééwéwiwlrw Meir, Capital Zarcus, Capital 239,300 i 1j http://ezto .mhhm. mcgraW-hill. c0m/hm_accounting.tpx?t0d0finintview 9/ 16/2010 Assignment Print View Page 7 of 7 Ross, Capital 15,500 i ' Potter, Capital E 143,667 http://ezto .mhhm. mcgraW-hill. c0m/hm_accounting.tpx?t0d0finintview 9/ 16/2010 ...
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