The capital accounts of Hassan Khan and Dmitri Palovich have balances of $877,500 and $710,800, respectively, on January 1, 20Y4, the beginning of the fisca year. On July 10, Khan invested an additional $25,000. During the year, Khan and Palovich withdrew $110,000 and $150,000, respectively, and net income for the year was $325,000. Revenues were $1,260,000, and expenses were $935,000. The articles of partnership make no reference to the division of net income. a. Journalize the entries to close (1) the revenues and expenses and (2) the drawing accounts on December 31. b. Prepare a statement of partnership equity for the current year for the partnership of Khan and Palovich.

The capital accounts of Hassan Khan and Dmitri Palovich have balances of $877,500 and $710,800, respectively, on January 1, 20Y4, the beginning of the fisca year. On July 10, Khan invested an additional $25,000. During the year, Khan and Palovich withdrew $110,000 and $150,000, respectively, and net income for the year was $325,000. Revenues were $1,260,000, and expenses were $935,000. The articles of partnership make no reference to the division of net income. a. Journalize the entries to close (1) the revenues and expenses and (2) the drawing accounts on December 31. b. Prepare a statement of partnership equity for the current year for the partnership of Khan and Palovich.

Financial Accounting

14th Edition

ISBN:9781305088436

Author:Carl Warren, Jim Reeve, Jonathan Duchac

Publisher:Carl Warren, Jim Reeve, Jonathan Duchac

Chapter12: Accounting For Partnerships And Limited Liability Companies

Section: Chapter Questions

Problem 3PB

See similar textbooks

Similar questions

The capital accounts of Lorraine Grecco and Carrie Rosenfeld have balances of $44,880 and $71,910, respectively, on January 1, 20Y4, the beginning of the fiscal year. On March 10, Grecco invested an additional $7,750. During the year, Grecco and Rosenfeld withdrew $30,730 and $38,870, respectively, and net income for the year was $62,000. Revenues were $483,000, and expenses were $421,000. The articles of partnership make no reference to the division of net income. Required: a. Journalize the entries to close (1) the revenues and expenses and (2) the drawing accounts on December 31. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered. b. Prepare a statement of partnership equity for the current year for the partnership of Grecco and Rosenfeld. Be…
The capital accounts of Lorraine Grecco and Carrie Rosenfeld have balances of $78,000 and $55,000, respectively, on January 1, 20Y4, the beginning of the fiscal year. On March 10, Grecco invested an additional $8,000. During the year, Grecco and Rosenfeld withdrew $41,000 and $33,000, respectively, and net income for the year was $104,000. Revenues were $525,000, and expenses were $421,000. The articles of partnership make no reference to the division of net income. Question Content Area a. Journalize the entry to close the revenues and expenses. If an amount box does not require an entry, leave it blank. blank - Select - - Select - - Select - - Select - - Select - - Select - - Select - - Select - Question Content Area Journalize the entry to close the drawing accounts. If an amount box does not require an entry, leave it blank. blank - Select - - Select - - Select - - Select - - Select - - Select - -…
The capital accounts of Lorraine Grecco and Carrie Rosenfeld have balances of $64,000 and $99,000, respectively, on January 1, 20Y4, the beginning of the fiscal year. On March 10, Grecco invested an additional $11,000. During the year, Grecco and Rosenfeld withdrew $43,000 and $53,000, respectively, and net income for the year was $84,000. Revenues were $654,000, and expenses were $570,000. The articles of partnership make no reference to the division of net income. a. Journalize the entry to close the revenues and expenses. If an amount box does not require an entry, leave it blank.
17. The following information relates to XXX and YYY’s partners capital accounts for fiscalyear ending June 30: XXXX YYY Balance, July 1 P86,400 P115,200 Add: Additional investment, January 1 38,400 19,200 Net Income for the year: Salaries 20,500 14,500 Interest 7,920 9,360 Bonus 3,720 Remainder 14,880 9,920 Total 171,820 168,180 Deduct: Drawings Monthly amounts 15,070 15,060 Additional drawings, June 30 2,400 403 Balance, June 30 154,350 152,717 Bonus is based on net income after salaries, interest and bonus. If the net income remains the same the following fiscal year, and there is no change in the partnership agreement nor any additional investment, how much will be YYY’s total share of the net income in the following year? A. P33,577 B. P33,780 C. P33,874 D. P33,696
Petra and Tasia, partners, divide profits and losses on the basis of average capitals. Capital accounts for the year endedDecember 31, 20x2, are shown below. The net profit for 20x2 is P270,000. (Changes in capitals during the first half of a monthare regarded as effective as of the beginning of the month; changes during the second half of a month are regarded aseffective as of the beginning of the following month.) The share of Petra on the 20x2 profit is:a. P114,500b. P154,500c. P115,500d. P125,260
Raj deposits 25 into a fund at the end of each month for 2 years. The total amount of interest earned by the fund during the last month of year 2 is 5. Calculate the accumulated amount in Raj's account at the end of year 2. (A) $ 670 (B) $ 655 (C) $ 650 (D) $ 660 (E) $ 664
Chris and Paul are partners with the following capital transactions during 2020: Chris Paul Debit Credit Debit Credit P 135,000 P 140,000 Balance, January 1, February 28 P 40,000 March 31 60,000 April 30 June 30 80,000 P 50,000 August 31 September 30 70,000 20,000 October 31 20,000 The Income Summary account has a credit balance of P510,000. Interest on average capital at 9 percent, salaries of P60,000 and P100,000 to Chris and Paul, respectively, a bonus to Chris of 25 percent of net income after interest and salaries but before the bonus, and the balance equally. REQUIREMENTS: Compute the total share of Chris in the partnerships' net income.
Amber and Berta share profits and losses equally after a 10% interest on their average capital balances. Consider additional capital contributions and permanent withdrawals as made at the end of the month in computing for average capitals. Total net income after tax for 2022 is P320,000. January 1 capital balances Additional investment of capital: March 15 Permanent withdrawal of capital: April 12 Drawings for each on October 28 Amber P 105,000 20,000 50,000 Berta P 140,000 (15,000) 40,000 6 Direction: Give the entries to record the distribution based on the following two options: a) Partners' drawings are not used in determining the average capital balances. b) All changes in capital and drawings should be considered in determining the average capital balances.
The capital accounts of Scott and Tucker at the end of the fiscal year 2019 are as follows: Scott, Capital January 1 Balance P210,000 Мay 1 Investment 90,000 October 1 Withdrawal Р60,000 Tucker, Capital January 1 Balance P150,000 April 1 Withdrawal P30,000 The partnership profit for the year ended December 31, 2019 was P300,000. Instruction: Prepare schedule of profit allocation and journal entries to record transfer to profit to the capital accounts under each of the following independent assumptions: 1. Profit is divided 60% to Scott and 40% to Tucker. 2. Profit is divided into ratio of capital balances at the beginning of the period. 3. Profit is divided in the ratio of average capital balance. Interest of 8% is allowed on the average capital and the balance of profit is divided equally. 4. Salaries of P60,000 and P48,000 are allowed to Scott and Tucker, respectively, and the balance of the profit is divided in the ratio of capital balances at the end of the period. 5. 6. Scott is…
Problem Below are the capital changes occurred on MonaLisa Partnership for the first year of operations: Date Mona, Capital Lisa, Capital Jan. 1 (original investment) P88,000 P69,000 Apr. 1 (3,000) Jun. 1 14,000 Oct. 1 6,000 (4,500) During the first year, the partnership earned net income of P66,600. Temporary withdrawals of P100 cash per month were agreed by both partners, and they both started withdrawing cash in July, and consistently made it monthly until year-end. Required: Determine the ending capital balances of both partners based on the following independent assumptions on allocating profits and losses. A P9,600 incentive to Mona, and the remainder to be allocated on the ratio of 1:2, respectively. It is also agreed that Lisa is guaranteed to receive at least P35,000 in case the partnership yields profit. 1. A 6% interest based on average capital balances, a monthly salary of P10,000 each to Mona and Lisa, and the remainder to be allocated equally. 2. A 10% interest on their…
After operating for 5 years, the books of A and B showed the following balances with equal distribution in profit: Assets (Cash and Non-cash assets) 130,000 A, Capital B, Capital If liquidation takes place at this point and the net assets are realized at P150,000. Profits and losses are shared equally. Compute the amount of cash distributed to partner B in the final settlement of their capital account. 60,000 70,000
At year-end, the Circle City partnership has the following capital balances: Manning, Capital . . . . . . . . . $130,000Gonzalez, Capital . . . . . . . . 110,000Clark, Capital . . . . . . . . . . . . 80,000Freeney, Capital . . . . . . .. . . 70,000 Profits and losses are split on a 3:3:2:2 basis, respectively. Clark decides to leave the partnership and is paid $90,000 from the business based on the original contractual agreement.If instead the partnership uses the bonus method, what is the balance of Manning’s capital account after Clark withdraws? Choose the correct.a. $100,000b. $126,250c. $130,000d. $133,750