Problem 12-1A (Concluded)
Income (Loss) Year 2
Sharing Plan Calculations Watts Lyon
(a) 40% x $90,000 income……………………………………..$36,000
60% x $90,000 income…………………………………….. $54,000
(b) 33 1/3% x $90,000 income………………………………..$30,000
66 2/3% x $90,000 income……………………………….. $60,000
Income (Loss) Year 3
Sharing Plan Calculations Watts Lyon
(a) 40% x $150,000 income……………………………………$60,000
60% x $150,000 income…………………………………… $ 90,000
Problem 12-2A (50 minutes)
1.
Dec. 31 Income Summary…………………………………………….249,000
Kara Ries, Capital………………………………………. 83,000
2.
Dec. 31 Income Summary…………………………………………….249,000
Kara Ries, Capital………………………………………. 62,250
3.
Dec. 31 Income Summary…………………………………………….249,000
Kara Ries, Capital………………………………………. 79,000
Tammy Bax, Capital…………………………………… 72,200
Joe Thomas, Capital………………………………….. 97,800
To close Income Summary*.
*Supporting calculations Ries Bax Thomas Total
Net income…………………………………………… $249,000
Problem 12-3A (40 minutes)
Part 1
Income (Loss)
Sharing Plan Calculations Bill Bruce Barb Total
(b) $450,000 x ($67,500/$750,000)…………………………………..
40,500
(c) Net income…………………………………………………………. $450,000
Salary allowances………………………………………………..$ 80,000 $ 60,000 $ 90,000 (230 ,000)
Balance of income………………………………………………. 220,000
Interest allowances
Problem 12-3A (Concluded)
Part 2
BBB PARTNERSHIP
Statement of Partners’ Equity
For Year Ended December 31
Bill Bruce Barb Total
Beginning capital balances…………..$ 0 $ 0 $ 0 $ 0
Plus
Investments by owners………………67,500 262,500 420,000 750,000
Net income
Salary allowances……………………. 80,000 60,000 90,000
Part 3
Dec. 31 Income Summary…………………………………………….209,000
Bill Beck, Capital……………………………………….. 67,550
Dec. 31 Bill Beck, Capital……………………………………………..34,000
Bruce Beck, Capital…………………………………………48,000
Problem 12-4A (50 minutes)
Part 1
a)
Feb. 1 Benson, Capital……………………………………………….138,000
b)
Feb. 1 Benson, Capital……………………………………………….138,000
c)
Feb. 1 Benson, Capital……………………………………………….138,000
d)
Feb. 1 Benson, Capital……………………………………………….138,000
e)
Feb. 1 Benson, Capital……………………………………………….138,000
Accumulated Depreciation—Equipment…………… 23,200
Meir, Capital*…………………………………………….. 22,950
Problem 12-4A (Concluded)
Part 2
a)
Feb. 1 Cash……………………………………………………………….200,000
Rhodes, Capital*……………………………………….. 200,000
To record admission of Rhodes.
b)
Feb. 1 Cash……………………………………………………………….145,000
Meir, Capital ($41,250* x 3/10)………………………….. 12,375
Benson, Capital ($41,250* x 2/10)……………………… 8,250
c)
Feb. 1 Cash……………………………………………………………….262,000
Meir, Capital ($46,500* x 3/10)……………………… 13,950
Problem 12-5A (75 minutes)
Note: All entries in this problem are dated May 31.
1.
(a) Cash……………………………………………………………….600,000
Inventory…………………………………………………… 537,200
Gain on Sale of Inventory…………………………… 62,800
(b) Gain on Sale of Inventory…………………………………62,800
(c) Accounts Payable……………………………………………245,500
Cash…………………………………………………………. 245,500
2.
(a) Cash……………………………………………………………….500,000
Loss on Sale of Inventory………………………………..37,200
Inventory…………………………………………………… 537,200
(b) Kendra, Capital ($37,200 x 3/6)………………………….18,600
(d) Kendra, Capital ($93,000 – $18,600)……………………74,400
Problem 12-5A (Concluded)
3.
(a) Cash……………………………………………………………….320,000
(b) Kendra, Capital ($217,200 x 3/6)………………………..108,600
Cash………………………………………………………………. 15,600
(c) Accounts Payable……………………………………………245,500
(d) Cogley, Capital ($212,500 – $72,400)………………….140,100
4.
(a) Cash……………………………………………………………….250,000
(b) Kendra, Capital ($287,200 x 3/6)………………………..143,600
Cogley, Capital ($50,600 x 2/3)…………………………. 33,733
(c) Accounts Payable……………………………………………245,500
(d) Cogley, Capital*………………………………………………. 83,034
(a) Cash……………………………………………………………….250,000
Loss on Sale of Inventory………………………………..287,200