POA11e17 - CHAPTER 17-SOLUTIONS PARTNERSHIPS Chapter 17 SE 1 1 2 3 e c d 4 a 5 b Chapter 17 SE 2 Cash 12,000 Office Equipment 8,000 Bob Capital

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Ch17 SE1 to SE4 CHAPTER 17-SOLUTIONS PARTNERSHIPS Chapter 17, SE 1. 1. e 4. a 2. c 5. b 3. d Chapter 17, SE 2. Cash 12,000 Office Equipment 8,000 Bob, Capital 12,000 Kim, Capital 8,000 To record formation of partnership Chapter 17, SE 3. Computation of capital ratios: Bob $12,000 12 ÷ 20 = 60% Kim 8,000 8 ÷ 20 = 40% $20,000 Division of income: Bob $5,000 × 60% = $3,000 Kim $5,000 × 40% = $2,000 Chapter 17, SE 4. Income of Partner Income Bob Kim Distributed Total Income for Distribution $5,000 Distribution of Interest Bob ( $12,000 × 10%) $1,200 Kim ( $ 8,000 × 10%) $ 800 ( 2,000) Remaining Income After Interest $3,000 Equal Distribution of Remaining Income Bob 1,500 Kim 1,500 ( 3,000) Remaining Income Income of Partners $2,700 $2,300 $5,000
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Ch17 SE5 to SE6 Chapter 17, SE 5. Income (Loss) of Partner Income Bob Kim Distributed Total Income for Distribution $5,000 Distribution of Interest Bob ( $12,000 × 10%) $1,200 Kim ( $ 8,000 × 10%) $ 800 ( 2,000) Remaining Income After Interest $3,000 Distribution of Salary Bob 6,000 ( 6,000) Negative Balance After Interest and Salary ($3,000) Equal Distribution of Negative Balance Bob ( 1,500) Kim ( 1,500) 3,000 Remaining Income Income and Loss of Partners $5,700 ($ 700) $5,000 Chapter 17, SE 6. The Capital account balances would remain the same at $15,000 for Bob and $10,000 for Sonia because Sonia is buying Kim's interest directly from Kim and not from the partnership. Kim, Capital 10,000 Sonia, Capital 10,000 To transfer Kim's Capital account balance to Sonia
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Ch17 SE7 Chapter 17, SE 7. Partners' equity in the original partnership $25,000 Cash investment by Sonia 11,000 Partners' equity in the new partnership $36,000 Sonia's equity: $36,000 × 1 / 6 $ 6,000 Bonus to original partners Investment by Sonia $11,000 Less equity assigned to Sonia 6,000 $ 5,000 Distribution of bonus to original partners Bob ( $5,000 × 1 / 2 ) $ 2,500 Kim ( $5,000 × 1 / 2 ) 2,500 $ 5,000 New Capital account balances: Bob $15,000 + $2,500 = $17,500 Kim $10,000 + $2,500 = $12,500 Sonia $6,000 Cash 11,000 Bob, Capital 2,500 Kim, Capital 2,500 Sonia, Capital 6,000 Investment by Sonia for one-sixth interest in partnership, bonus distributed to Bob and Kim
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Ch17 SE8 Chapter 17, SE 8. Partners' equity in the original partnership $25,000 Cash investment by Sonia 5,000 Partners' equity in the new partnership $30,000 Sonia's equity: $30,000 × 1 / 4 $ 7,500 Bonus to new partner Equity assigned to Sonia $7,500 Less investment by Sonia 5,000 $ 2,500 Distribution of bonus from original partners Bob ( $2,500 × 1 / 2 ) $1,250 Kim ( $2,500 × 1 / 2 ) 1,250 $ 2,500 New Capital account balances: Bob $15,000 $1,250 = $13,750 Kim $10,000 $1,250 = $ 8,750 Sonia $7,500 Cash 5,000 Bob, Capital 1,250 Kim, Capital 1,250 Sonia, Capital 7,500 Investment by Sonia for one-fourth interest in partnership, bonus from Bob and Kim
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Ch17 SE9 to SE10 Chapter 17, SE 9. Sonia, Capital
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This note was uploaded on 11/02/2011 for the course ACCT 210 taught by Professor Mcgonigal during the Spring '11 term at E. Washington.

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POA11e17 - CHAPTER 17-SOLUTIONS PARTNERSHIPS Chapter 17 SE 1 1 2 3 e c d 4 a 5 b Chapter 17 SE 2 Cash 12,000 Office Equipment 8,000 Bob Capital

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